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11. On December 31, 2012, Flint Corporation sold for $100,000 an old machine having an original cost of $180,000 and a book value of $80,000.
11. On December 31, 2012, Flint Corporation sold for $100,000 an old machine having an original cost of $180,000 and a book value of $80,000. The terms of the sale were as follows: $20,000 down payment $40,000 payable on December 31 each of the next two years The agreement of sale made no mention of interest; however, 9% would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2012 rounded to the nearest dollar? (The present value of an ordinary annuity of 1 at 9% for 2 years is 1.75911.) a. $70,364 b. $90,364. c. $80,000. d. $140,728. 21. On May 1, 2012, Goodman Company began construction of a building. Expenditures of $240,000 were incurred monthly for 5 months beginning on May 1. The building was completed and ready for occupancy on September 1, 2012. For the purpose of determining the amount of interest cost to be capitalized, the average accumulated expenditures on the building during 2012 were a. $200,000. b. $240,000. c. $960,000. d. $1,200,000. 22. Wilson Co. purchased land as a factory site for $800,000. Wilson paid $80,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title investigation and making the purchase. Architect's fees were $31,200. Title insurance cost $2,400, and liability insurance during construction cost $2,600. Excavation cost $10,440. The contractor was paid $2,500,000. An assessment made by the city for pavement was $6,400. Interest costs during construction were $170,000. The cost of the land that should be recorded by Wilson Co. is a. $880,480. b. $886,880. c. $889,880. d. $896,280.
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