ExamSpr10 - Exam No Dr M.D Chase Accounting 300A...

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Exam No: Dr. M.D. Chase Accounting 300A Examination 3 Kieso et. al 10 th Spring 2003 Business ethics are the cornerstone of a successful free enterprise economy. Personal ethics are the foundation for all personal intercourse. In the University setting, ethical behavior is part of academic honesty. Please read and sign the following statement: This examination represents my sole effort. I have neither given nor received aid in the completion of this examination. S i
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Dr. M.D. Chase Name: Examination 3 Accounting 300A Page 1 of 14 For each of the following multiple choice or true/false questions, select the best answer. In all instances requiring a computation, show computations in good form. Questions 1-2 are based on the following information: MDC Inc. purchased land for a factory site for $400,000. The company also incurred the following exp/rev: $42,000 to raze the old buildings; sold the salvaged lumber and brick for $6.300; incurred legal fees of $1,850 for title search and purchase contract; incurred engineering fees of $2,200 for new building; paid $68,000 for new building plans Paid $1,500 for title insurance policy on the land; Paid $900 for a liability insurance policy on building construction; Incurred total construction fees of $2,740,000 ($1,200,000 paid at beginning of construction and $1,540,000 paid upon completions ; Incurred $170,000 of interest on construction costs. 1. What is the cost of the land? a. $439,050 b. $437,550 c. $445,350 d. $441,250 e. None of these 2. What is the cost of the building? a. $ 1,781,100 b. $ 2,981,100 c. $ 2,978,900 d. $2,811,100 e. None of these 3. What are the major characteristics of plant assets? a. Acquired for use in operations b. Not for resale c. Benefit more than one period d. (a) and (c) e. All of the above 4. Distinguish between depreciation, depletion and amortization: a. Depreciation refers to the allocation of the cost of tangible assets to the periods they benefit b. Depletion refers to the utilization of natural assets c. Amortization refers to the utilization of intangible assets d. All these terms refer to the allocation of costs to the periods benefited e. All of the above 5. How should gains and losses on “impaired assets” be reported on the income statement: a. Continuing operations b. Extraordinary items c. Other items d. Either (b) or (c) e. None of the above
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Dr. M.D. Chase Name: Examination 3 Accounting 300A Page 2 of 14 Questions 6-9 refer to the following information. Joe Schmoe purchased a computer system for $6,000 on July 1, 2001. The life of the computer is 4 years and it is expected to have a salvage value of $1,000. Joe estimates the system will allow him to produce 1000 tax returns during its life. Joe produce 200 tax returns during 2002. 6.
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ExamSpr10 - Exam No Dr M.D Chase Accounting 300A...

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