ACCT 2010 UNT EXAM 3 CHPT. 7, 8,9 Questions and Correct Answers

Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land? Cost of new parking lot constructed on the land Chanit Company purchased a building and land for $540,000 in total. Individually, the land appraised for $228,000 and the building appraised for $342,000. How much of the purchase price should be allocated to the cost of the land? $216,000 Suppose you buy land for $2,800,000 and spend $1,100,000 to develop the property. You then divide the land into lots as follows: 15 Hilltop Lots ... $510,000 15 Valley Lots ... $240,000 How much did each Hilltop lot cost you? $176,800 $510,000/($510,000+240,000)=68% 68% * (2,800,000+$1,100,00)/ 15 = $176,800 Whitmore Corporation purchased a new delivery van on the last day of its fiscal year. The cost of the delivery van will appear on Whitmore's _______________ in the year of purchase. Balance sheet When a company expenses the cost of maintenance for its heating and cooling system, that cost will appear on its Income statement Capitalizing a cost involves increasing what type of account? Asset A capital expenditure adds to an asset. Which of the following items should be accounted for as a capital expenditure? Taxes paid in conjunction with the purchase of office equipment Plant Master Company purchased a delivery van for $35,000 on January 1. The van has an estimated 10-year life with a residual value of $6,000. What would the depreciation expense for this van be in the first year if Plant MasterPlant Master uses the straight-line method? $2,900 $35,000-$6,000/10=$2,900