Indicate whether each of the following expenditures should be classified as land, land improvements, buildings, equipment, or none ofthese.1.2.Parking lotsElectricity used by a machine3.Excavation costs4.Interest on building construction loan5.Cost of trial runs for machinery6.Drainage costs7.Cost to install a machine8.Fences9.Unpaid (past) property taxes assumed10.Cost of tearing down a building when land and a building on it are purchased

Step 1: Step 2: Step 3: Step 4:

Answered: Indicate whether each of the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following would be non-deductible capital expenditure: (a.) The investment banker fees incurred in a hostile take-over (b.) The cost of fixing a leaky copper pipe in an office building. (c.) The cost of removing asbestos and re-insulating an entire office building (d.) The cost of paper supplies used in a law office.
Question Two: Choose the best answer 1. Which of the following capital assets would not be depreciated? a) The city's streetlights. b) Purchased computer software. c) The partially completed city hall. d) The artwork owned and displayed in the city parks. 2. Goods for which a purchase order had been placed at an estimated cos were received at an actual cost of $985. The journal entry in the Gener: record the receipt of the goods will include a: a) Debit to Reserve for Encumbrances for $1,000. b) Credit to Vouchers Payable for $985. c) Debit to Expenditures for $985. d) All of the above are correct. W 直

(Multiple Choice Question) The cost of land includes 1. The purchase price of the land, plus the legal costs and land improvements such as fencing 2. The purchase price, legal fees, and any other costs needed to get the land ready for its intended use 3. Just the purchase price of the land 4. The purchase price plus land improvements such as fencing
Which of the following is a capital expenditure? Select one: a. Cost to add air conditioning to a company car b. Cost to purchase three ashtrays for the company conference room c. Cost to replace spark plug on company lawnmower d. Cost to have store windows washed e. None of the above
What is the cost of the land, based upon the following data? Land purchase price $192,605 Broker's commission 15,004 Payment for the demolition and removal of existing building 4,204 Cash received from the sale of materials salvaged from the demolished building 1,211 $fill in the blank 1
A company purchased property for a building site. The costs associated with the property were: Purchase price $175,000 Real estate commissions 15,000 Legal fees. Expenses of clearing the land Expenses to remove old building 800 2,000 1,000 What portion of these costs should be allocated to the cost of the land and what portion should be alloca the cost of the new building? $175,800 to Land; $18,800 to Building O $190,000 to Land; $3,800 to Building $190,800 to Land; $1,000 to Building O $192,800 to Land; $0 to Building O $193,800 to Land; $0 to Building
(Multiple Choice) A major renovation, such finishing the basement of a house is considered a(n) 1. Expense 2. Operating Expenditure 3. Capital Expenditure 4. Amortizable Cost
If land is purchased as a building site, the cost of removing existing structures is not charged to the Land account.Select one:a. FALSEb. TRUE
Spector Enterprises needed a new soccer facility. They made the following expenditures for the project: Amount Expenditure Installation of machinery Machinery purchased Storage charges for machinery because new building was not ready Installation of new roof Architect's fees Hauling charges to move equipment from storage 8,286 72,349 662 1,178 7,820 396 19,892 Removal of old building 24 995,718 Construction costs of new building Cash paid for land and existing building Freight on machinery purchased Survey to site the new building Legal fees for title search Clearing of land for parking lot 107,544 1,227 5,358 915 5,906 REQUIRED: Prepare a schedule showing the amounts to be recorded as Land, Building, Machinery & Equipment, and Expenses. Use the following format: Machinery & Equipment Expenditure Building Expenses Land Totals
What is the cost of the land, based upon the following data? Land purchase price $179,980 Broker's commission 15,546 Payment for the demolition and removal of existing building 3,928 Cash received from the sale of materials salvaged from the demolished building 2,519 $fill in the blank 1
1. The cost of land typically includes the purchase price and all of the following costs except A) private driveways and parking lots. B) assumption of any liens or mortgages on the property. C) street lights, sewers, and drainage systems cost. D) grading, filling, draining, and clearing costs.
Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price $ 191,000 Real estate commissions 16,600 Legal fees 2,400 Expenses of clearing the land Expenses to remove old building 3,600 2,600 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

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