1. storm Corporation purchased new m@chine on october 31, 2014 A $2.400 down payment was made and three monthly installments of $7,200 each are to be made beginning on November 30, 2014. The cash price would have been $23,200. Storm paid no installation charges under the monthly payment plan but S400 installation charge would have been incurred with a cash purchase. The amount to be capitalized as the cost of the machine on October 31, 2014 would be A $23,200 B. $23,600. C. $24,000, D. $24,400 2. On January 2, 2014, Rapid Deivery Company traded in an old delivery truck for a newer model The exchange had commercial substance. Date relative to the old and new trucks follow Old Truck Oniginal cost Accumulated depreciation as of January 2. 2014 Fair Value of old truck 30,000 20,000 7.500 $45.000 37.500 Cash paid with trade-in What is the gain or (loss) on the old truck A $1,500. B. s(2,s00). C$37,500 D. $(10,000). 3. Equipment that cost s220,000 and has accumulated depreciation of $100,000 is exchanged for equipment with a fair value of $160,000 and $40,000 cash is received. The exchange lacked The gain to be recogrzed from the exchange is (hint: partial gain recognition since boot received) A. $80,000 B. $20,000 C. $60,000 D. $16,000 4. An improvement made to a machine increased its production capacity by 25% without extending the machine's uselul life. The cost of the improvement should be A. expensed. B, debited to accumulated depreciation. C. capitalzed in the machine account D, allocated between accumul ated depreciation and the machine account 5. On December 1, 2014, Hogan Co purchased a tract of land as a factory site for $750,000. The oid building on the property was demoished, and salvaged materials resulting from demolition were sold. Additional costs incurred and salvage proceeds realized during December 2014 were as folows: Cost to demolish old buildina Legal fees for Durchase ntract and to record ownership Titie quarantee insurance Proceeds from sale of salvaged materials 70,000 10,000 16,000 In Hogan 's December 31, 2014 balance sheet, what amount should be reperted as land A $776,000 B. S812,000 C. $838,000 D. $846,000 6. During 2014, Kimmel Co, incurred weighted-average accumulated expenditures of $800,000 during construction of assets that qualified for capitalization of irterest. The only debt outstanding during 2014as a $1,000,000, 109, 5-year e payaie. what is the amount of interest that should be ceptalized by Kimmel during 2014 A 580,000 B. S100,000 C. So D. $20,000 7. On Januaryl 1, 2013, Verlin Co purchased new machinery for $300,000. There is no salvage value. The machinery has an estimated useful ide of S years, and depreciation is computed by the sum-of-the years-digits method. The accumulated depreciation on this machinery at December 31, 2014, should be (note: this is the end of the second year of depreciation) A S200,000 B. S120,000 C. S180,000 D. $100,000 8. The book value of a plant asset is A the fair market value of the asset at a balance sheet date B the assessed value of the asset for proerty tax purposes. C. equal to the balance of the related accumu ated depreciation account. D. the asset's acquisition cost less the accumulated depreciation recorded to date 9. Grover Corporation purchased atruck at the beginning of 2014 for $93,600. The truck is estimated to have a salvage value of $3,600 and a useful Ife of 120,000 miles R was driven 21,000 miles in 2014. What is the depreciation expense for 2014 A $15,750 B. $21,750 C537.500