1.

A company purchased land for $83000 cash. Real estate brokers' commission was $3700 and $6500 was spent for demolishing an old building on the land before construction of a new building could start. Proceeds from salvage of the demolished building was $1900. Under the historical cost principle, the cost of land would be recorded at

2.

A machine was purchased for $78000 and it was estimated to have a $6000 salvage value at the end of its useful life. Monthly depreciation expense of $1110 was recorded using the straight-line method. The annual depreciation rate is

3.

Compton Inc. made a $500 ordinary repair to a piece of equipment. Compton's accountant debited this amount to the asset account, Equipment and credited Cash. Was this the correct entry and if not, why not?

1. No, the correct entry would be a debit to Cash and a credit to Maintenance and Repairs Expense.

2. No, the correct entry would be a debit to Maintenance and Repairs Expense and a credit to Cash.

3. No, the correct entry would be a debit to Service Revenue and a credit to Cash.

4. Yes, this was the correct entry

4.

In 2014, Bridgeport Corp. has plant equipment that originally cost $200000 and has accumulated depreciation of $54000. A new processing technique has rendered the equipment obsolete, so it is retired. Which of the following entries should Bridgeport use to record the retirement of the equipment?

1.Loss on Disposal of Plant Assets		146000
	Accumulated Depreciation - Equipment		146000

2.Accumulated Depreciation - Equipment		54000
Loss on Disposal of Plant Assets		146000
	Equipment		200000

3.Plant Equipment		200000
	Accumulated Depreciation - Equipment		54000
	Loss on Disposal of Plant Assets		146000

4,Loss on Disposal of Plant Assets		146000
	Equipment		146000