Question :
31) All of the following characteristics of property, plant and : 1212468
31) All of the following are characteristics of property, plant and equipment except:
A) tangible.
B) long-lived.
C) held for investment.
D) used in the business.
32) The cost of paving a parking lot should be charged to:
A) a natural resource.
B) land improvements.
C) land.
D) repairs and maintenance expense.
33) A lump-sum purchase of assets requires an allocation of the purchase price among the assets acquired. This allocation method is called the:
A) book-value method.
B) relative-fair-value method.
C) accumulated method.
D) betterment approach.
34) Lumac Corporation purchased land and a building for $1,500,000. An appraisal indicates that the land’s value is $650,000 and the building’s value is $975,000. The amount that would be debited to the building account is:
A) $1,056,250.
B) $900,000.
C) $975,000.
D) $995,000.
35) Utsman Enterprises Ltd. purchased land, buildings, and equipment for $2,400,000. The land has been appraised at $865,000, the buildings at $1,175,000, and the equipment at $510,000. The equipment account will be debited for:
A) $500,000.
B) $525,000.
C) $410,156.
D) $480,000.
36) Grubbs Company Ltd. acquired land and buildings for $1,350,000. The land is appraised at $475,000 and the buildings are appraised at $775,000. The debit to the buildings account will be:
A) $712,500.
B) $675,000.
C) $837,000.
D) $775,000.
37) Talbert Company Ltd. purchased land, buildings, and equipment for $3,000,000. The land has been appraised at $865,000, the buildings at $1,175,000, and the equipment at $510,000. The land account will be debited for:
A) $1,382,353.
B) $1,017,647.
C) $600,000.
D) $865,000.
38) Which of the following is included in the cost of a plant asset?
A) amounts paid to ready the asset for its intended use
B) regular maintenance cost
C) normal repair cost
D) wages of workers who use the asset
39) A company purchased a used machine for $80,000. The machine required installation costs of $8,000 and insurance while in transit of $500. At which of the following amounts would the equipment be recorded?
A) $80,500
B) $88,500
C) $88,000
D) $80,000
40) Acme Investments plans to develop a shopping center. In the first quarter, they spent the following amounts:
Purchase land
$90,000
Surveys and legal fees
1,200
Land clearing
5,000
Install fences around the property
4,600
Install lighting and signage
2,600
What amount should be recorded as the land cost?
A) $90,000
B) $91,200
C) $103,400
D) $96,200
41) A company’s accountant capitalizes a payment that should be recorded as an expense. Which of the following is true?
A) Revenue is overstated.
B) Expenses are overstated.
C) Assets are overstated.
D) Liabilities are overstated.
42) A company’s accountant capitalizes a payment that should be recorded as an expense. Which of the following is true?
A) Net income is overstated.
B) Revenues are understated
C) Assets are understated.
D) Liabilities are overstated.
