Q1. During 2020, the Tidel Company completed the following transactions related to its property, plant, and equipment accounts:

a.	On March 18, Tidel paid $480,000 for land, buildings, and equipment in a lump-sum purchase. An appraisal that cost Tidel $10,000 revealed fair market values of $200,000 for the land, $150,000 for the buildings, and $150,000 for the equipment.
b.	On August 11, Tidel issued 20,000 shares of its $10 par value common stock in exchange for some equipment. The equipment's fair market value is estimated at $360,000 by an outside appraisal. On the date of the exchange, the stock was being actively traded at $17 per share on a major stock exchange.

	Required:
	Prepare the necessary journal entry to properly record each transaction.

CHART OF ACCOUNTS

Tidel Company

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
160	Investment in Land
171	Land
172	Land Improvements
181	Building
182	Leasehold Improvements
185	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
313	Additional Paid-In Capital on Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
510	Lease Expense
511	Insurance Expense
512	Utilities Expense
514	Repair and Maintenance Expense
521	Salaries Expense
532	Bad Debt Expense
534	Royalty Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expense
910	Income Tax Expense

General Journal

Prepare the necessary journal entry to properly record the transactions.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7

Q2. Minor Corp. has agreed to expand its operations by opening a manufacturing plant in Bel Air, Maryland. In return, Bel Air will donate an abandoned building and the 5 acres on which it sits to Minor. The land originally cost $1,000,000 and the building $3,000,000. The building's current book value is $380,000, and current appraisals are: land $8,000,000 and building $3,600,000. Minor has also agreed to provide 100 jobs for the next 5 years to Bel Airs' city residents. Minor estimates that the wages to these residents will amount to $4,000,000.

Required:

Prepare the journal entry to record this acquisition on Minor's books.

Chart of Accounts

CHART OF ACCOUNTS

Minor Corp.

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Building
171	Land
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue
881	Gain on Receipt of Donated Property

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expense
910	Income Tax Expense

General Journal

Prepare the journal entry to record this acquisition on Minor's books on December 31.

General Journal Instructions

PAGE 10

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3

Q3. Robertson Company exchanged a machine for some land. The machine had cost $17,000, was 70% depreciated, and could be sold for $4,500. Robertson paid $950 in addition to giving up the machine.

Required: a. Compute the amount at which the land should be recorded and the amount of gain or loss on the exchange.

Value of land	$fill in the blank 1
Gain on exchangeLoss on exchange	$fill in the blank 3

b. Assume, instead, that Robertson exchanged the machine for a new, more efficient machine with a fair value of $4,700, while still paying $950 as before. Compute the gain or loss that would be recorded on the sale of the old machine by Roberto.

Gain on exchangeLoss on exchange

$fill in the blank 5

Q4. Christopher Company borrowed $6 million at 11% on January 1, 2020, to build a new building. The building is expected to take 18 months to complete. Christopher invests the money from the project until it is needed for construction. He is currently earning 10%. The following is the expenditures as they relate to the construction of the building.

January 1	$1,500,000
April 1	$1,850,000
October 1	$1,100,000
December 31	$1,000,000

Required: 1. Compute the amount of interest expense Christopher would capitalize. $fill in the blank 1

2. Compute the amount of interest revenue Christopher would recognize. $fill in the blank 2