Question : 111.Which of the following would be considered a capital expenditure? a. Cost : 1244479

111.Which of the following would be considered a capital expenditure?

 

a.

Cost to lubricate a machine

b.

Cost to acquire a printing press

c.

Cost to replace some light bulbs

d.

Cost to paint the factory wall

 

 

 

112.An expenditure to lengthen the useful life of a company vehicle would require a

 

a.

credit to Vehicles.

b.

debit to Depreciation Expense.

c.

debit to Accumulated Depreciation.

d.

debit to Cash.

 

 

 

113.Which of the following would not be considered a capital expenditure?

 

a.

The addition of a building wing

b.

A complete overhaul of an air-conditioning system

c.

The cost of installing a piece of equipment

d.

A tune-up of a company vehicle

 

 

 

114.A company purchases for $24,000 an asset that has a useful life of six years and no residual value. After two years, the company spends $4,000 for a major overhaul that will extend the machine’s useful life four years beyond the original six. Assuming straight-line depreciation, how much depreciation should be taken in year 3?

 

a.

$2,500

b.

$2,800

c.

$4,000

d.

$2,000

 

 

 

115.Which of the following would not be included in the cost of land?

 

a.

Cost of clearing unneeded building from land

b.

Cost of paving land for parking

c.

Commission to real estate agent

d.

Sewer assessment from local government

 

 

 

116.The portion of a group purchase of land and a building for $657,000 allocated to land when the land is appraised at $170,000 and the building on the land is appraised at $510,000 is

 

a.

$174,250.

b.

$502,750.

c.

$492,750.

d.

$164,250.

 

 

 

117.Which of the following would not be debited to the Machinery account?

 

a.

Installation costs

b.

Electricity used by the machine

c.

Cost of trial runs

d.

Freight charges

 

 

 

118.Land and a building on the land are purchased for $336,000. The appraised values of the land and building are $60,000 and $300,000, respectively. The cost allocated to the building should be

 

a.

$280,000.

b.

$28,000.

c.

$150,000.

d.

$122,000.

 

 

 

119.In general, a cost incurred in conjunction with a long-term asset is included in the long-term asset account when the cost

 

a.

is incurred prior to asset use.

b.

will expire in less than one year.

c.

exceeds a certain dollar amount.

d.

is incurred subsequent to asset use.

 

 

 

120.Interest costs are included in the cost of an asset in conjunction with

 

a.

long-term assets acquired for speculative purposes.

b.

long-term assets being purchased.

c.

long-term assets being constructed.

d.

natural resources and intangible assets.