10 - Class Exercises (with solutions)

10 - Class Exercises (with solutions) - ACC211 NVCC...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ACC211 NVCC Annandale Mitchell Chapter 10 Class Exercises SOLUTIONS IN RED 1. The following expenditures were incurred by Nationals Company in purchasing land: cash price $69,090, accrued taxes $2,492, attorneys' fees $2,556, real estate broker's commission $2,064, and clearing and grading $3,447. What is the cost of the land? All of the expenditures should be included in the cost of the land. Therefore, the cost of the land is $79,649 , or ($69,090 + $2,492 + $2,556 + $2,064 + $3,447). 2. Braves Company acquires a delivery truck at a cost of $55,600. The truck is expected to have a salvage value of $3,700 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method. Depreciable cost of $51,900, or ($55,600 - $3,700). With a 4-year useful life, annual depreciation is $12,975, or ($51,900 ÷ 4). Under the straight-line method, depreciation is the same each year. Thus, depreciation is $12,975 for both the first and second years. 3. Lightning Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 155,160 miles. Taxi no. 10 cost $39,920 and is expected to have a salvage value of $310. Taxi no. 10 is driven 30,860 miles in year 1 and 20,020 miles in year 2. Compute the depreciation for each year. (Round depreciation cost per unit to 2 decimal places, e.g. 10.50. Use rounded numbers for future calculations. Round final answers to 0 decimal places, e.g. 125.) The depreciation cost per unit is $0.26 cents per mile computed as follows: Depreciable cost ($39,920 - $310) ÷ 155,160 = $0.26 Year 1 30,860 miles × $0.26 = $8,024 Year 2 20,020 miles × $0.26 = $5,205 4. Marlins Company sells office equipment on September 30, 2010, for $20,258 cash. The office equipment originally cost $72,059
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/28/2011 for the course ACC 211 taught by Professor Mitchell during the Spring '11 term at Northern Virginia Community College.

Page1 / 3

10 - Class Exercises (with solutions) - ACC211 NVCC...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online