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ACT_3391_Chp_10_Homework_Solutions

ACT_3391_Chp_10_Homework_Solutions - Intermediate...

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Intermediate Accounting I Amanda N. Paul, CPA, MBA Troy University
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Chapter 10 EXERCISE 10-1 Land Item Land Improvements Building Other Accounts (a) ($275,000) Notes Payable (b) $275,000 (c) $ 8,000 (d) 7,000 (e) 6,000 (f) (1,000) (g) 22,000 (h) 250,000 (i) 9,000 (j) $ 4,000 (k) 11,000 (l) (5,000) (m) 13,000 (n) 19,000 (o) 14,000 (p) 3,000
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EXERCISE 10-2 The allocation of costs would be as follows: Land Building Land $400,000 Razing costs 42,000 Salvage (6,300) Legal fees 1,850 Survey $ 2,200 Plans 68,000 Title insurance 1,500 Liability insurance 900 Construction 2,740,000 Interest 170,000 $439,050 $2,981,100
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EXERCISE 10-3 1. Truck #1 13,900.00 Cash 13,900.00 1. Truck #2 14,727.26* Discount on Notes Payable 1,272.74 Cash 2,000.00 Notes Payable 14,000.00 *PV of $14,000 @ 10% for 1 year = $14,000 X .90909 = $12,727.26 $12,727.26 + $2,000.00 = $14,727.26 3. Truck #3 15,200.00 Cost of Goods Sold 12,000.00 Inventory 12,000.00 Sales 15,200.00
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EXERCISE 10-3 continued [Note to instructor: The selling (retail) price of the computer system appears to be a better gauge of the fair value of the consideration given than is the list price of the truck as a gauge of the fair value of the consideration received (truck). Vehicles are very often sold at a price below the list price.] 1. Truck #4 13,000.00 Common Stock 10,000.00 Paid-in Capital in Excess of Par 3,000.00 (1,000 shares X $13 = $13,000)
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