Adama Company incurred the following costs.Indicate to which account Adama would debit each of the costs. 1. Sales tax on factory machinery purchased $ 5,000 Select the account to be debited Land ImprovementsLandPrepaid InsuranceBuildingEquipment 2. Painting of and lettering on truck immediately upon purchase 700 Select the account to be debited Prepaid InsuranceBuildingLand ImprovementsLandEquipment 3. Installation and testing of factory machinery 2,000 Select the account to be debited Prepaid InsuranceBuildingLandEquipmentLand Improvements 4. Real estate broker’s commission on land purchased 3,500 Select the account to be debited Prepaid InsuranceBuildingLandEquipmentLand Improvements 5. Insurance premium paid for first year’s insurance on new truck 880 Select the account to be debited EquipmentPrepaid InsuranceLand ImprovementsBuildingLand 6. Cost of landscaping on property purchased 7,200 Select the account to be debited Prepaid InsuranceLand ImprovementsEquipmentBuildingLand 7. Cost of paving parking lot for new building constructed 17,900 Select the account to be debited LandEquipmentLand ImprovementsPrepaid InsuranceBuilding 8. Cost of clearing, draining, and filling land 13,300 Select the account to be debited BuildingLandLand ImprovementsEquipmentPrepaid Insurance 9. Architect’s fees on self-constructed building 10,000 Select the account to be debited

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5PA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...

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Adama Company incurred the following costs.

Indicate to which account Adama would debit each of the costs.

1.	Sales tax on factory machinery purchased	$ 5,000	Select the account to be debited Land ImprovementsLandPrepaid InsuranceBuildingEquipment
2.	Painting of and lettering on truck immediately upon purchase	700	Select the account to be debited Prepaid InsuranceBuildingLand ImprovementsLandEquipment
3.	Installation and testing of factory machinery	2,000	Select the account to be debited Prepaid InsuranceBuildingLandEquipmentLand Improvements
4.	Real estate broker’s commission on land purchased	3,500	Select the account to be debited Prepaid InsuranceBuildingLandEquipmentLand Improvements
5.	Insurance premium paid for first year’s insurance on new truck	880	Select the account to be debited EquipmentPrepaid InsuranceLand ImprovementsBuildingLand
6.	Cost of landscaping on property purchased	7,200	Select the account to be debited Prepaid InsuranceLand ImprovementsEquipmentBuildingLand
7.	Cost of paving parking lot for new building constructed	17,900	Select the account to be debited LandEquipmentLand ImprovementsPrepaid InsuranceBuilding
8.	Cost of clearing, draining, and filling land	13,300	Select the account to be debited BuildingLandLand ImprovementsEquipmentPrepaid Insurance
9.	Architect’s fees on self-constructed building	10,000	Select the account to be debited

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