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- 39 - What does a company doing a gallery business classify the vehicles it holds for sale in the normal course of business? A) StocksB) Investment propertyC) Tangible fixed assetD) VehiclesE) Financial AssetsAllocating payments and receipts to fixed asset accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk. a. Fee paid to attorney for title search 2,500 b. Cost of real estate acquired as a plant site: Land 285,000 Building (to be demolished) 55,000 c. Delinquent real estate taxes on property, assumed by purchaser 15,500 d. Cost of tearing down and removing building acquired In (b) 5,000 e. Proceeds from sale of salvage materials from old building 4,000 f. Special assessment paid to city for extension of water main to the property 29,000 g. Architects and engineers fees for plans and supervision 60,000 h. Premium on one-year insurance policy during construction 6,000 i. Cost of filling and grading land 12,000 j. Money borrowed to pay building contractor 900,000 k. Cost of repairing windstorm damage during construction 5,500 1. Cost of paving parking lot to be used by customers 32,000 m. Cost of trees and shrubbery planted 11,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 2,500 p. Proceeds from insurance company for windstorm and vandalism damage 7,500 q. Payment to building contractor for new building 800,000 r. Interest incurred on building loan during construction 34,500 s. Refund of premium on insurance policy (h) canceled after 11 months 500 Instructions 1.Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows: Item Land Land improvements Building Other Accounts 2.Determine the amount debited to Land, Land Improvements, and Building. 3.The costs assigned to the land, which is used as a plant site, will not be depreciated, while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. 4.What would be the effect on the current years income statement and balance sheet if the cost of filling and grading land of 12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.CP 8‐1 Accountants distinguish between capital and revenue expenditures for some types of transactions. The entries for such transactions can be made to any one of the following accounts: Balance sheet accounts Land Buildings Land improvements Equipment Trucks Automobiles Accumulated depreciation Income statement accounts A revenue account An expense account. Required: For each transaction below, indicate the account to be adjusted. Explain your answers and state any assumptions you make. Example: Buildings - Architect fees to design building Battery purchased for truck Cash discount received on payment for equipment Commission paid to real estate agent to purchase land Cost of equipment test runs Cost to remodel building Cost to replace manual elevator with automatic elevator Cost of sewage system Equipment assembly expenditure Expenditures for debugging equipment Installation of air‐conditioner in automobile Insurance paid during construction of building Legal fees…
- Q17 Which of the following journal entries correctly reflect settlement date accounting? Select one: a. DR Liability for acquisition of financial assetCR Bank b. DR Financial asset (to be delivered)CR Liability for acquisition of financial asset c. DR Debtor (to deliver the financial asset)CR Liability for acquisition of financial asset d. DR Financial asset (delivered)CR BankMCQS 31In the general ledger, a separate "account" is maintained for each:Type of asset and liability and for each element of owners' equity.Business transaction.Business day.Journal entry. MCQS 32 The cost of a new windshield wiper on a delivery vehicle would be classified as:A. A capital expenditure.B. A revenue expenditure.C. Part of the cost of goods sold.D. An unusual and infrequent expense MCQS 33 The cash effects of transactions that create revenues and expenses arefinancing activities.investing activities.operating activities.processing activities. MCQS 34 Harvard Company purchased equipment having an invoice price of $11,500. The terms of sale were 2/10, n/30, and Harvard paid within the discount period. In addition, Harvard paid a $160 delivery charge, $185 installation charge, and $931 sales tax. The amount recorded as the cost of this equipment is:A. $11,845.B. $12,776.C. $11,615.D. $12,546. MCQS 35 Immaterial items may be accounted for in the most convenient manner,…b. Allow 5% depreciation on Premises on cost. Please I want in World Document.
- Question 3A businessman has bought the following items for his business uses: Machinery RM100,000Computers RM50,000Pen RM10A4 paper rim RM15Printer cartridge RM20 Required: (iii) State an accounting concept whichever applicable that requires an accounting adjustment in the presentation of financial statements.CORNERSTONE 2.1 Four statements are given below. Pewterschmidt Company values its inventory reported in the financial statements in terms of dollars instead of units Property, plant, and equipment is recorded at cost (minus any accumulated depreciation) instead of liquidation value. The accounting records of a company are kept separate from its owners. The accountant assigns revenues and expenses to specific years before preparing the financial statements. Required: Give the accounting assumption that is most applicable to each of the statements.Ex 410 Classifying assets Identify each of the following as (a) a current asset or (b) property, plant, and equipment: 1. Accounts Receivable 2. Building 3. Cash 4. Land 5. Prepaid Insurance 6. Supplies
- 17 Which of the following is an example of proper accounting when it comes to reporting amounts on a company's balance sheet? Multiple Choice X Company reported its land at the amount it could be sold for on the balance sheet date, which is higher than the original cost of the land. X Company reported its damaged equipment at an amount lower than it originally cost. X Company reported its inventory at its current market value, which is higher than its original cost. X Company included the amount owed to suppliers in its notes receivable at the amount owed on the balance sheet date.S1: Branch fixed assets can be carried on the home office’s books under adecentralized accounting system. S2: If branch fixed assets are recorded on the home office’s books, depreciation expense, would not be charged to branch operation. A. Both statements are incorrect.B. Only S2 is correct.C. Only S1 is correct.D. Both statements are correct.34 Assume that the ABC LLC purchased a machine for OMR 5000 cash. What would be the journal entry? a. Dr Cash A/C and Cr Machinery A/C b. None of the given options c. Dr Accounts receivables A/C and Cr Cash A/C d. Dr Machinery A/C and Cr Cash A/C Clear my choice
