Answer_Keys_WEEK10

Answer_Keys_WEEK10 - Quick Study 10-2 (10 minutes) 1. The...

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Quick Study 10-2 (10 minutes) 1. The main difference between plant assets and current assets is that current assets are consumed or converted into cash within a short period of time, while plant assets have a useful life of more than one accounting period. 2. The main difference between plant assets and inventory is that inventory is held for resale and plant assets are not. 3. The main difference between plant assets and long-term investments is that plant assets are used in the primary operation of the business and investments are not. Exercise 10-1 (15 minutes) Invoice price of machine. ........................................ $ 10,400 Less discount (.01 x $10,400). ................................ (104 ) Net purchase price. ................................................. 10,296 Freight charges (transportation-in). ...................... 235 Mounting and power connections. ........................ 719 Assembly. ................................................................. 339 Materials used in adjusting. ................................... 40 Total cost to be recorded. ....................................... $ 11,629 Note: The $250 repair charge is an expense because it is not a normal and reasonable expenditure necessary to get the asset in place and ready for its intended use. Problem 10-1A (50 minutes) Part 1 Estimated Market Value Percent of Total Apportioned Cost Building. ....................... $514,250 55% $495,000 Land. ............................. 271,150 29 261,000 Land improvements. ... 65,450 7 63,000 Vehicles. ....................... 84,150 9 81,000 Total. ............................. $935,000 100 % $900,000 2009 Jan. 1 Building. ......................................................... 495,000 Land. ............................................................... 261,000
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Land Improvements. ..................................... 63,000
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This note was uploaded on 05/04/2011 for the course STAT 1301 taught by Professor Smslee during the Spring '08 term at HKU.

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Answer_Keys_WEEK10 - Quick Study 10-2 (10 minutes) 1. The...

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