Question :
Multiple Choice
51. Real Angus Steakhouse purchased land for $75,000 cash. : 1255978
Multiple Choice
51. Real Angus Steakhouse purchased land for $75,000 cash. They also incurred commissions of $4,500, property taxes of $5,000, and title insurance of $800. The $5,000 in property taxes includes $4,000 in back taxes paid by Real Angus on behalf of the seller and $1,000 due for the current year after the purchase date. For what amount should Real Angus Steakhouse record the land?
a.
$83,500.
b.
$84,300.
c.
$85,300.
d.
$75,000.
52. Which of the following would be recorded as land improvements?
a. Property taxes.
b. Title insurance.
c. Real estate commissions.
d. Adding a parking lot.
53. Bad Brads BBQ purchased a piece of equipment by paying $5,000 cash. They also incurred a shipping cost of $400 to get the equipment to its factory. The fair value of this equipment is $7,000. For what amount should Bad Brads BBQ record the equipment?
a.
$5,000.
b.
$5,400.
c.
$7,000.
d.
$7,400.
54. Wiley Company purchased new equipment for $60,000. Wiley paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,000; sales tax paid $3,000; and installation cost, $2,500. The cost recorded for the equipment was:
a.
$60,000.
b.
$61,000.
c.
$64,000.
d.
$66,500.
55. Cowboy Development incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building:
Sale price of the land
$400,000
Sale of salvaged parts already on land
$20,000
Demolition of the old building
$30,000
Ground breaking ceremony (food and supplies)
$1,500
Land preparation and leveling
$7,500
What amount should be recorded for the purchase of the land?
a.
$437,500.
b.
$417,500.
c.
$439,000.
d.
$419,000.
56. Bahama Catering purchased a commercial dishwasher by paying cash of $5,000. The dishwasher’s fair value on the date of the purchase was $5,600. The company incurred $400 in transportation costs, $300 installation fees, and paid a $200 fine for illegal parking while the dishwasher was being delivered. For what amount will Bahama record the dishwasher?
a.
$5,600.
b.
$5,700.
c.
$5,900.
d.
$6,300.
57. The following financial information is from Cook Company:
Accounts Payable
$55,000
Land
$90,000
Inventory
$10,500
Accounts Receivable
$7,500
Equipment
$8,000
Unearned Revenue
$58,500
Short-term Investments
$20,000
Notes Receivable (due in 8 months)
$45,500
Interest Payable
$2,000
Patents
$75,000
What is the amount of long-term assets assuming the accounts above reflect normal activity?
a.
$342,500.
b.
$173,000.
c.
$273,500.
d.
$98,000.
58. Capital Construction purchased a 3-acre tract of land for a building site for $350,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title insurance was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period after the purchase date. The capitalized cost of the land is:
a. $366,400.
b. $366,150.
c. $364,650.
d. $231,150.
59. Landon Co. purchased a $500,000 tract of land that is intended to be the site of a new office complex. Landon incurred additional costs and realized salvage proceeds as follows:
Demolition of existing building on site
$75,000
Legal and other fees to close escrow
15,000
Proceeds from sale of demolition scrap
10,000
What would be the capitalized cost of the land?
a.$500,000.
b.$575,000.
c.$580,000.
d.$590,000.
60. Fruitasia purchased land, a building, and equipment for $800,000. The estimated fair values of the land, building, and equipment are $100,000, $700,000, and $200,000, respectively. At what amount would the company record the land?
a.$80,000.
b.$90,000.
c.$100,000.
d.$800,000.
