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

Hi student Since there are multiple questions, we will answer only first question. If you want…

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

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 42E

See similar textbooks

Similar questions

Indicate whether each of the following expenditures should be classified as land (L), land improvements (LI), buildings (B), equipment (E), or none of these (X). _____ 1. Parking lots _____ 2. Electricity used by a machine _____ 3. Interest on building construction loan _____ 4. Cost of trial runs for machinery _____ 5. Drainage costs _____ 6. Cost to install a machine _____ 7. Fences _____ 8. Unpaid (past) property taxes assumed _____ 9. Cost of tearing down a building when land and a building on it are purchased
Problem 1 The following payments and receipts are related to Land, Land Improvements, and Buildings: Finder’s fee paid to real estate agency $ 4,000 Cost of real estate acquired as Plant site $400,000 Fee paid to attorney for title search $ 2,500 Delinquent real estate taxes, assumed by purchaser $ 31,750 Architects and engineers fees for plans $36,000 Cost of removing building on land purchased $ 10,000 Proceeds from sale of materials from demolished building $ 3,000 Cost of filling and grading land $ 15,200 Insurance premium during building construction $ 5,400 Money borrowed to pay building contractor $600,000 Cost of extending water main to property $ 9,000 Cost of constructing sidewalks and curbs $ 13,200 Cost of repairing vandalism damage during construction $ 3,000 Cost of trees and shrubs planted $ 12,000 Cost of paving parking lot $ 14,500 Interest on loan for building construction $ 33,000 Property taxes on…
Ay 1. Mcq Borden Company incurred the following costs to acquire and prepare land for a new parking lot: purchase price for land, cost to clear the land, cost of paving, lighting for the parking lot, and landscaping for the parking lot. How should the company determine which costs should be recorded as Land Improvements and which cost should be recorded as Land? a. The costs with an unlimited life will increase Land, and the costs with a limited useful life will increase Land Improvements. b. The costs with a limited life will increase Land, and the costs with an unlimited useful life will increase Land Improvements. c. The costs to be depreciated will increase Land, and the costs that will not be depreciated will increase Land Improvements d. Costs that are depreciable will increase Land Improvements, while other costs are expensed immediately because of a lack of definite life.
1. Tap fees, a portion of which exceed the cost of hooking customers into the utility, should be accounted for as a. capital contributions. b. ordinary revenues. c. a combination of capital contributions and ordinary revenues. d. extraordinary items. 2. Landfill closure and postclosure costs should be recognized as expenses a. in the periods incurred. b. in the period that the landfill is closed. c. in the periods that the landfill is in operation. d. in the period in which the landfill is opened. 3. Which of the following would not be included in the computation of the amount to be recognized as a landfill closure expense? a. The total estimated closure costs b. The capacity of the landfill c. The proportion of capacity used in prior years d. An appropriate discount rate 4. A city maintains a staff of internal auditors. It may properly account for its internal audit costs in an internal service fund only if a. it is required to do so by state or city statutes or regulations. b.…
How should the following expenditures and receipts related to land, land improvements, and buildings acquired for use in a business enterprise be classified? 1. Money borrowed to pay building contractor 2. Payment for construction from note proceeds 3. Cost of land fill and clearing 4. Delinquent real estate taxes on property assumed AUDPRO2 32 Exercise 1 5. Premium on 6-month insurance policy during construction 6. Architect’s fee on building 7. Cost of real estate purchased as a plant site (land, P2,000,000; building, P500,000) 8. Commission fee paid to real estate agency 9. Installation of fences around property 10. Cost of razing and removing building
The cost of installing new equipment would be debited to which of the following accounts? Oa. Land Improvements Ob. Buildings Oc. Repairs and Maintenance Expense Od. Machinery and Equipment
Capital & Revenue Expenditure Consider the following list of expenses incurred by a company: Purchase of a motor car Claim for a meal Purchase of shares in a supplier Purchase of a new computer Payment for hotel accommodation Installation cost for server Purchase of raw materials Repair of motor vehicles Purchase of new stationery Payment of an insurance premium Wages Purchase of a new plot of land. Required: Examine this list and determine if each expense is revenue or capital expenditure. You are required to provide a short explanation for your choice.
Can please get help with practice question 5.6 with a quick explaination of how? Required information Skip to question [The following information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,650,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $780,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $360,000 and is expected to last another 12 years with no salvage value. The land is valued at $1,860,000. The company also incurs the following additional costs. Cost to demolish Building 1 $ 348,400 Cost of additional land grading 195,400 Cost to construct Building 3, having a useful life of 25 years and a $398,000 salvage value 2,242,000 Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 168,000 Required: 1. Allocate the…
Which of the following is considered capital expenditure Select one: a. Research expenses. b. Purchase of office consumables. c. Cost of material to construct new plant. d. Staff overtime.
Indicate where the following items would be shown on abalance sheet.(a) A lien that was attached to the land when purchased.(b) Landscaping costs.(c) Attorney’s fees and recording fees related to purchasingland.(d) Variable overhead related to construction of machinery.(e) A parking lot servicing employees in the building.(f) Cost of temporary building for workers during constructionof building.(g) Interest expense on bonds payable incurred duringconstruction of a building.(h) Assessments for sidewalks that are maintained bythe city.(i) The cost of demolishing an old building that was onthe land when purchased.
Question- please provide an answer for 1.1.3 1.1.2 Busi Ngidi is the sole proprietor of Ngidi’s Clothing Manufacturers which was renting property in an industrial park. To expand her operations, Ngidi’spurchased its own property, demolish the old building, construct a new buildingand install new equipment. The following costs were made available Ignore VATimplications: (2) Equipment RPurchase price of equipment- 400 000Cost of transport and installation of equipment- 70 000Fine paid for illegal transport of equipment - 10 000 Property RPurchase price of property- 840 000Legal and transfer fees- 21 000Cost of demolishing old building- 30 000Proceeds from sale of old building material- 9000Architect’s and engineers’ fees - 16 000Cost of construction of new building- 502 000 Determine which one of the following amounts represents the total capitalisedcost of the asset, property.A) R1 400 000B) R1 363 000C) R1 418 000D) R1 379 000 The answer is D) R1 379 000 1.1.3 Using the information…
Which of the following items should be accounted for as a capital expenditure?a. The monthly rental cost of an office buildingb. Costs incurred to repair leaks in a building’s roofc. Maintenance fees paid with funds provided by the company’s capitald. Taxes paid in conjunction with the purchase of office equipment