Adams Company purchased a tract of land, an office building, and some
manufacturing equipment for $775,000.
The appraised value of the land,
building, and equipment were $373,100, $427,700, and $109,200, respectively.
What was the debit to the Building account to record the purchase?
When a firm buys land on which there is a building, and the building is torn down
so that an appropriate new building can be constructed on the land:
A. any of the purchase cost allocated to the old building is reported as a loss.
B. the cost assigned to the land excludes the cost of the old building.
C. the total cost of the land and old building are capitalized as land cost.
D. any of the purchase cost allocated to the old building is capitalized as part of
the cost of the new building.
E. any of the above are generally acceptable accounting alternatives.
In 20X7, Mountain Ore, Inc., paid $8,250,000 for land with an estimated 600,000
tons of ore.
Mountain Ore plans to sell the land for $300,000 when all of the ore
has been extracted.
In 20X7, 24,000 tons of ore were mined and sold.
depletion expense for the year?
Speedy Deliveries Services owns and operates a fleet of delivery vehicles.
of these is (are) considered to an ordinary repair by Speedy?
Major engine overhaul.
Replace dead battery.
Add hydraulic lift to back of truck.
Both B and C are ordinary repairs.
Which of the following statements is false?
Land is never depreciated.
An asset’s residual value and useful life must be estimated in order to
At the end of its useful life, the remaining book value of an asset will
always equal its fair market value
The units-of-production method is most appropriate for an asset that wears
out due to physical use.
Which of the following is (are) accounted for as intangible assets?