5.

Johnson Co. purchased land and a building for $120,000. The land was appraised at $40,000 and the building on the land was appraised at $85,000. Based on the appraisals, how much of the $120,000 cost should be allocated to the land?

		a. $38,400
		b. $37,500
		c. $35,000
		d. $37,000

6. An asset is purchased for $11,000. It has an estimated residual value of $2,000 and an estimated useful life of six years. After two years of use, the estimated residual value is revised to $1,000. Assuming straight-line depreciation, depreciation expense in year three of use would be (if necessary, round your answer to the nearest whole dollar):

		a. $1,286
		b. $1,250
		c. $1,100
		d. $1,750

10. Additions and Betterments are charged (debited) to the asset's accumulated depreciation account.

		a. True
		b. False

12. Jones Co. borrows $30,000 from the bank at 9% interest on August 31. Jones' journal entry to record accrued interest on the note on September 30 would include (use a 365-day year):

		a. a debit to Interest Expense for $221.92
		b. a credit to Interest Revenue for $225.00
		c. a debit to interest Receivable for $225.00
		d. a debit to Interest Payable for $221.92