Question : Multiple Choice Questions 1.Real Angus Steakhouse purchased land for $75,000 cash. : 1236201

Multiple Choice Questions
 

1.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.

2.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.

3.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.

4.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.

5.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:

What amount should be recorded for the purchase of the land?
A.$437,500.
B.$417,500.
C.$439,000.
D.$419,000.

6.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.

7.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.

8.On July 1, 2012, 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 during 2012 as follows:

What would be the capitalized cost of the land?
A.$500,000.
B.$575,000.
C.$580,000.
D.$590,000.

9.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.

10.Productive assets that are physically used up, or depleted are:
A.Equipment.
B.Land.
C.Land improvements.
D.Natural resources.

 

 

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