Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 7, Problem 7.1.3P
To determine
Concept Introduction:
Capital Expenditures are that type of expenses which a company incurs on its tangible or fixed assets in regard to either its purchase or for its repairs or installation. These assets are those which are used for more than one year i.e. which are not held for sale. These expenditures are like purchase of land, building, equipment, repairs or improvement in the building or machinery, etc. These expenses are meant for capitalization in the balance sheet in the respective fixed assets.
The contradictory application of the concept of depreciation in relation to land.
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Allocating 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
$2,000
b.
Cost of real estate acquired as a plant site: Land
280,000
Building (to be demolished)
55,000
c.
Delinquent real estate taxes on property, assumed by purchaser
15,000
d.
Cost of razing and removing building acquired in (b)
5,000
e.
Proceeds from sale of salvage materials from old building
3,000
*
f.
Special assessment paid to city for extension of water main to the property
29,000
g.
Architect’s and engineer’s fees for plans and supervision
60,000
h.
Premium on one-year insurance policy during construction
7,000
i.
Cost of filling and grading land
13,000
j.
Money borrowed to pay building…
Allocating 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
$3,000
b.
Cost of real estate acquired as a plant site: Land
280,000
Building (to be demolished)
55,000
c.
Delinquent real estate taxes on property, assumed by purchaser
16,000
d.
Cost of razing and removing building acquired in (b)
5,000
e.
Proceeds from sale of salvage materials from old building
5,000
*
f.
Special assessment paid to city for extension of water main to the property
28,000
g.
Architect’s and engineer’s fees for plans and supervision
70,000
h.
Premium on one-year insurance policy during construction
7,000
i.
Cost of filling and grading land
11,000
j.
Money borrowed to pay building…
Allocating 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
$3,000
b.
Cost of real estate acquired as a plant site: Land
290,000
Building (to be demolished)
60,000
c.
Delinquent real estate taxes on property, assumed by purchaser
16,000
d.
Cost of razing and removing building acquired in (b)
4,000
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
28,000
g.
Architect’s and engineer’s fees for plans and supervision
70,000
h.
Premium on one-year insurance policy during construction
5,000
i.
Cost of filling and grading land
13,000
j.
Money borrowed to pay building…
Chapter 7 Solutions
Survey of Accounting (Accounting I)
Ch. 7 - Which of the following expenditures incurred in...Ch. 7 - What is the amount of depreciation, using the...Ch. 7 - An example of an accelerated depreciation method...Ch. 7 - Prob. 4SEQCh. 7 - Prob. 5SEQCh. 7 - Which of the following qualities are...Ch. 7 - Prob. 2CDQCh. 7 - Prob. 3CDQCh. 7 - Prob. 4CDQCh. 7 - Are the amounts at which fixed assets are reported...
Ch. 7 - a. Does the recognition of depreciation in the...Ch. 7 - Backyard Company purchased a machine that has a...Ch. 7 - Is it necessary for a business to use the same...Ch. 7 - Prob. 9CDQCh. 7 - Prob. 10CDQCh. 7 - Prob. 11CDQCh. 7 - Prob. 12CDQCh. 7 - Prob. 13CDQCh. 7 - Prob. 14CDQCh. 7 - Prob. 15CDQCh. 7 - Costs of acquiring fixed assets Summer Wilks owns...Ch. 7 - Determine cost of land Snowy Ridges Ski Co. has...Ch. 7 - Determine cost of land Four Corners Delivery...Ch. 7 - Nature of depreciation Custer Construction Co....Ch. 7 - Straight-line depreciation rates Convert each of...Ch. 7 - Straight-line depreciation A refrigerator used by...Ch. 7 - Depreciation by two methods A Caterpillar tractor...Ch. 7 - Depreciation by two methods Equipment acquired at...Ch. 7 - Partial-year depreciation Sandblasting equipment...Ch. 7 - Capital and revenue expenditures About Time...Ch. 7 - Capital and revenue expenditures Dehra Bundy owns...Ch. 7 - Prob. 7.12ECh. 7 - Sale of asset Equipment acquired on January 9,...Ch. 7 - Disposal of fixed asset Equipment acquired on...Ch. 7 - Recording depletion MacLean Mining Co. acquired...Ch. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Book value of fixed assets Apple. Inc., designs,...Ch. 7 - Balance sheet presentation List the errors you...Ch. 7 - Prob. 7.1.1PCh. 7 - Allocate payments and receipts to fixed asset...Ch. 7 - Prob. 7.1.3PCh. 7 - Compare three depreciation methods Bayside...Ch. 7 - Depreciation by two methods; partial years Knife...Ch. 7 - Depreciation by two methods; sale of fixed asset...Ch. 7 - Depreciation by two methods; sale of fixed asset...Ch. 7 - Depreciation by two methods; sale of fixed asset...Ch. 7 - Amortization and depletion entries Data related to...Ch. 7 - Prob. 7.5.2PCh. 7 - Prob. 7.1MBACh. 7 - Prob. 7.2.1MBACh. 7 - Prob. 7.2.2MBACh. 7 - Prob. 7.3.1MBACh. 7 - Prob. 7.3.2MBACh. 7 - Prob. 7.3.3MBACh. 7 - Prob. 7.3.4MBACh. 7 - Prob. 7.4MBACh. 7 - Prob. 7.5.1MBACh. 7 - Asset turnover United Continental Holdings. Inc.,...Ch. 7 - Prob. 7.6.1MBACh. 7 - Prob. 7.6.2MBACh. 7 - Prob. 7.7.1MBACh. 7 - Prob. 7.7.2MBACh. 7 - Prob. 7.8.1MBACh. 7 - Prob. 7.8.2MBACh. 7 - Prob. 7.9.1MBACh. 7 - Prob. 7.9.2MBACh. 7 - Prob. 7.1CCh. 7 - Prob. 7.2CCh. 7 - Prob. 7.3.1CCh. 7 - Prob. 7.3.2CCh. 7 - Effect of depreciation on net income Einstein...Ch. 7 - Prob. 7.4CCh. 7 - Prob. 7.5CCh. 7 - Prob. 7.6C
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