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ACC Chapter 18 - Chapter 18 Plant Equipment 1 A company...

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Chapter 18 - Plant & Equipment 1. A company purchased land for $60,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. The cost of land should be recorded at a. $67,000. b. $60,000. c. $65,000. d. $72,000. 2. Which is not considered a part of the cost of a business truck? 3. Which of these assets does not decline in potential over its useful life? 4. Four categories for plant assets might be a. land, land improvements, buildings, and equipment. b. intangibles, land, buildings, and equipment. c. furnishings and fixtures, land, buildings, and equipment. d. property, plant, equipment, and land. 5. The cost of land does not include 6. Holman Inc. purchases land for $50,000 cash. The company assumes $1,000 in property taxes. Legal fees totaled $2,000. Holman grades the land for $3,000. What does Holman Inc. record as the cost
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for the land? a. $50,000. b. $51,000. c. $53,000. d. $56,000. 7. Holman Company buys land for $1,000 in 1976. The land was appraised at $1,000,000. on 1/1/03 and $1,100,000 on 12/31/03. What amount should the Land account be increased? 8. Holman Company purchases land for $50,000 cash. Additional costs are as follows: Removal of shed $ 500 Grading 2,500 Salvage value of shed lumber 500 Broker commission 1,000 Paving of parking lot 10,000 Closing costs 2,000 Sutton will record the acquisition cost of the land as 9. Holman Incl puts in a new parking lot with paving costs of $50,000 and parking lot lights costs of $10,000. 10. Land improvements should be depreciated over the useful life of the a. land.
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b. buildings on the land. c. land or land improvements whichever is longer. d. land improvements. 11. Newcome's Daycare is building a new campus that will take three years to complete. Some of the costs will be financed by funds borrowed during the construction period. There will also be architect fees, excavation fees, and building permit fees. Which of the following is true? the building.
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