Exercise 9-02 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  BuildingPrepaid InsuranceLandEquipmentLand Improvements 2.   Painting of and lettering on truck immediately upon purchase   700   Select the account to be debited  LandBuildingEquipmentLand ImprovementsPrepaid Insurance 3.   Installation and testing of factory machinery   2,000   Select the account to be debited  BuildingLand ImprovementsPrepaid InsuranceLandEquipment 4.   Real estate broker’s commission on land purchased   3,500   Select the account to be debited  Land ImprovementsPrepaid InsuranceEquipmentBuildingLand 5.   Insurance premium paid for first year’s insurance on new truck   880   Select the account to be debited  Prepaid InsuranceEquipmentLand ImprovementsBuildingLand 6.   Cost of landscaping on property purchased   7,200   Select the account to be debited  BuildingLandLand ImprovementsEquipmentPrepaid Insurance 7.   Cost of paving parking lot for new building constructed   17,900   Select the account to be debited  BuildingPrepaid InsuranceLandEquipmentLand Improvements 8.   Cost of clearing, draining, and filling land   13,300   Select the account to be debited  LandBuildingEquipmentLand ImprovementsPrepaid Insurance 9.   Architect’s fees on self-constructed building   10,000   Select the account to be debited  Land ImprovementsPrepaid InsuranceBuildingEquipmentLand

Question

Exercise 9-02

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
 BuildingPrepaid InsuranceLandEquipmentLand Improvements
2.  
Painting of and lettering on truck immediately upon purchase
  700   Select the account to be debited
 LandBuildingEquipmentLand ImprovementsPrepaid Insurance
3.  
Installation and testing of factory machinery
  2,000   Select the account to be debited
 BuildingLand ImprovementsPrepaid InsuranceLandEquipment
4.  
Real estate broker’s commission on land purchased
  3,500   Select the account to be debited
 Land ImprovementsPrepaid InsuranceEquipmentBuildingLand
5.  
Insurance premium paid for first year’s insurance on new truck
  880   Select the account to be debited
 Prepaid InsuranceEquipmentLand ImprovementsBuildingLand
6.  
Cost of landscaping on property purchased
  7,200   Select the account to be debited
 BuildingLandLand ImprovementsEquipmentPrepaid Insurance
7.  
Cost of paving parking lot for new building constructed
  17,900   Select the account to be debited
 BuildingPrepaid InsuranceLandEquipmentLand Improvements
8.  
Cost of clearing, draining, and filling land
  13,300   Select the account to be debited
 LandBuildingEquipmentLand ImprovementsPrepaid Insurance
9.  
Architect’s fees on self-constructed building
  10,000   Select the account to be debited
 Land ImprovementsPrepaid InsuranceBuildingEquipmentLand

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