Jing Company was started on January 1, Year 1 when it issued common stock for $31,000 cash. Also, on January 1, Year 1 the company purchased office equipment that cost $15,500 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $1,600. The equipment had a five-year useful life and a $6,000 expected salvage value Assume that Jing Company earned $19,800 cash revenue and incurred $12,500 in cash expenses in Year 3. Using straight-line depreciation and assuming that the office equipment was sold on December 31, Year 3 for $9,800, the amount of net income or (loss) appearing on the December 31, Year 3 income statement would be: Multiple Choice ($1,340) $4,260 S4 440 On January 6, Year 1, the Mount Jackson Corporation purchased a tract of land for a factory site for $775,000. An existing building on the site was demolished and the new factory was completed on October 11, Year 1. Additional cost data are shown below Construction cost of new building Real estate and attorney fees $920, 000 11, 200 Architect fees 74,000 Cost of demolish old building 70,100 Salvage recovery from old building (8, 000) Which of the following correctly states the capitalized cost of the (a) land and (b) the new building, respectively? Multiple Choice $775.000 and $1,067300 Which of the following correctly states the capitalized cost of the (a) land and (b) the new building, respectively? Multiple Choice $775,000 and $1,067300 $786,200 and $1,056,100 $856,300 and $986,000 $848.300 and $994.000 Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,330,000. Harding paid $315,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $333,000; Building, $990,000 and Equipment, $657,000. What value will be recorded for the building? Multiple Choice 665.000 340000 157500 What value will be recorded for the building? Multiple Choice 665,000 340,000 157500 990,000 Anchor Company purchased a manufacturing machine with a list price of $100,000 and received a 2 % cash discount on the purchase. The machine was delivered under terms FOB shipping point, and freight costs amounted to $5,200. Anchor paid $7,500 to have the machine installed and tested. Insurance costs to protect the asset from fire and theft amounted to $9,800 for the first year of operations. Based on this information, the amount of cost recorded in the asset account would be Multiple Choice $120,500. $103,200 $110,700 Multiple Choice $120,500 $103,200. $110,700 $98,000
