Question - 1Indicate whether each of the following expenditures shouldImprovements (LI), buildings (B), equipment (E), or none of these (X).IL 1. Parking lotsX 2. Electricity used by a machineB 3. Excavation costsB 4. Interest on building construction loanE 5. Cost of trial runs for machineryL 6. Drainage costs7. Cost to install a machine4 8. Fencesk 9. Unpaid (past) property taxes assumed10. Cost of tearing down a building when land and a building on it are purchasedQuestion - 2Seller Corporation purchased land adjacent to its plant to improve access for trucks makingdeliveries. Expenditures incurred in purchasing the land were as follows: purchase price, SR50,000; broker's fees, SR 6.000;) title (search and other fees, SR 5,000; demolition of an oldbuilding on the property, (SR 5,700 grading, SR 1,200digging foundation for the road, SR 3,000;laying and paving driveway, SR 25,000; lighting SR 7,500; signs, SR 1,500. List the items andamounts that should be included in the Land account.Lawd acaustion cost67900Question - 3Eastman Company purchased a delivery truck for SR 35,000 on January 1, 2008. The truck wasassigned an estimated useful life of 100,000 miles and has a residual value of SR 10,000. Thetruck was driven 18,000 miles in 2008 and 22,000 miles in 2009. Compute depreciation expenseusing the units-of-activity method for the years 2008 and 2009.Question - 4Tanner Company purchased equipment on January 1, 2007 for SR 70,000. It is estimated thatthe equipment will have a SR 5,000 salvage value at the end of its 5-year useful life. It is alsoestimated that the equipment will produce 100,000 units over its 5-year life.Instructions

Question - 1 Indicate whether each of the following expenditures should De improvements (LI), buildings (B), equipment (E), or none of these (X). I 1. Parking lots X 2. Electricity used by a machine B 3. Excavation costs B 4. Interest on building construction loan E 5. Cost of trial runs for machinery I 6. Drainage costs 7. Cost to install a machine 4 8. Fences k 9. Unpaid (past) property taxes assumed 10. Cost of tearing down a building when land and a building on it are purchased

Question - 1 Indicate whether each of the following expenditures should De improvements (LI), buildings (B), equipment (E), or none of these (X). I 1. Parking lots X 2. Electricity used by a machine B 3. Excavation costs B 4. Interest on building construction loan E 5. Cost of trial runs for machinery I 6. Drainage costs 7. Cost to install a machine 4 8. Fences k 9. Unpaid (past) property taxes assumed 10. Cost of tearing down a building when land and a building on it are purchased

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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