An owner of a business found a great deal and pays $5,000 for a truck to be used in the business. The owner estimates that the truck had a market value of $8,000, and decides to record the new asset for $8,000 in the books of the business. What principle or concept of GAAP has the owner violated in recording the truck at the value of $8,000? O The Cost Concept O The Objectivity Concept O The Unit of Measure Concept O The Matching Concept

An owner of a business found a great deal and pays $5,000 for a truck to be used in the business. The owner estimates that the truck had a market value of $8,000, and decides to record the new asset for $8,000 in the books of the business. What principle or concept of GAAP has the owner violated in recording the truck at the value of $8,000? O The Cost Concept O The Objectivity Concept O The Unit of Measure Concept O The Matching Concept

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 23MC: A company purchased a building twenty years ago for $150,000. The building currently has an...

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A company purchased a building twenty years ago for $150,000. The building currently has an appraised market value of $235,000. The company reports the building on its balance sheet at $235,000. What concept or principle has been violated? A. separate entity concept B. recognition principle C. monetary measurement concept D. cost principle
Ngo Company purchased a truck for $54,000. Sales tax amounted to $5,400; shipping costs amounted to $1,200; and one-year registration of the truck was $100. What is the total amount of costs that should be capitalized? A. $60,600 B. $66,100 C. $54,000 D. $59,400
Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Capstone Consulting Services acquired land 5 years ago for $200,000. Capstone recently signed an agreement to sell the land for $375,000. In accordance with the sales agreenwnt, the buyer transferred $375,000 to Capstone’s bank account on February 20. How would elements of the accounting equation be affected by the sale?
Byrde Company purchased a truck. The seller asked for $11,400, but Byrde paid only $10,400 after negotiation. The owner of Byrde Company believes he got a great deal and the truck is really worth $15,400. What anmount does Byrde record on its financial statements for the truck?
Al Meedaniyah Company business purchased a machine for RO 25,000. The manager estimates the value of the machine to be RO 26000 in the market. If the Business follows Historical Cost concept, the amount to be recorded for Machine is a. RO 5000 b. RO 25,000 c. RO 26,000 d. RO 1,000
A transport company purchased a truck for RO 35, 000 to be used in the business. The manager estimates the value of the truck to be RO 45,000 in the market. If the Business follows Historical Cost concept, the amount to be recorded for the truck is a. RO 1,000 b. RO 35,000 c. RO 26,000 d. RO 41,000
Garcia Co. owns equipment that costs $78,300, with accumulated depreciation of $40,800. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $47,000 cash B. $37,500 cash C. $30,000 cash If an amount box does not require an entry, leave it blank. A. fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 B. fill in the blank 14 fill in the blank 15 fill in the blank 17 fill in the blank 18 fill in the blank 20 fill in the blank 21 C. fill in the blank 23 fill in the blank 24 fill in the blank 26 fill in the blank 27 fill in the blank 29 fill in the blank 30 fill in the blank 32 fill in the blank 33
Bramble Manufacturing has old equipment that cost $56,000. The equipment has accumulated depreciation of $27,600. Bramble has decided to sell the equipment. (a)What entry would Bramble make to record the sale of the equipment for $30,000 cash? (b)What entry would Bramble make to record the sale of the equipment for $15,000 cash?
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 an account to be debited 2. Painting of and lettering on truck immediately upon purchase 700 Select an account to be debited 3. Installation and testing of factory machinery 2,000 Select an account to be debited 4. Real estate broker’s commission on land purchased 3,500 Select an account to be debited 5. Insurance premium paid for first year’s insurance on new truck 880 Select an account to be debited 6. Cost of landscaping on property purchased 7,200 Select an account to be…