QUESTION 14 2 points 101 Tatum Company has four products in its inventory Information about the December 31, 2019. Inventory is as follows: Product Total Cost Total Net Realizable Value $100,000 $100,000 90,000 110,000 60,000 50,000 104 45,000 40,000 102 103 Question The book value of inventory at December 31, 2019, assuming the lower of cost and net realizable value rule would be $295,000 $310,000 $265,000 $280,000 Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price. Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance Legal fees for drawing the contract Property taxes State transfer fees $16,000 5,000 36,000 4,000 An independent appraisal estimated the fair values of the land and building, Property taxes included $6,000 of delinquent taxes. purchased separately, at $3.3 and 51.1 milion, respectively Question Assume that immediately after acquisition, Samtech demolished the building Demolition costs were $250.000 and the salvaged materials were sold for $10,000. In addition, Samtech spent $86,000 clearing and grading the land in preparation for the construction of a new building. Journal entries would include: C adebit to Land for $4,356.000 adotto Land for $3,023,250 a debt to Land for $4,357,000 a dobit to Land for $3.267,750 2 points Save Answer QUESTION 17 Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price. Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance $16.000 Legal foos for drawing the contract 5,000 Property taxes 36,000 State transfer fees An indepondent appraisal estimated the fair values of the land and building, purchased separately, at $3.3 and $1.1 million, respectively. Property taxes included $6,000 of delinquent taxes. Question Journal ontries for the assets Samtech acquired in these transactions would include: 4,000 adebit to Land for $3,018,750 a dobit to Buildings for $0 a debit to Land for $4.001,000 a debit to Buildings for $1,007,750 QUESTION 17 2 points Seven Jackpot Mining Company paid $1,200,000 in 2019 for a copper mine site and spent an additional $500,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately 4 years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: Cash Outflow Probability 1 $300,000 25% 2 400,000 45% 3 600,000 30% The credit-adjusted risk-free rate of interest is 10% Question Journal entries to record the acquisition costs of the mine would include: a debit to Copper Mine for $1,700,000 a debit to Copper Mine for $2.135.000 a debit to Copper Mine for $1.997,109 a debit to Copper Mine for $3,017,301 Jackpot Mining Company paid $1,200,000 in 2019 for a copper mine site and spent an additional $500,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately 4 years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: Cash Outflow Probability 1 $300,000 25% 2 400,000 45% 3 600,000 The credit-adjusted risk-free rate of interest is 10% Question The 2020 year-end adjusting entries for recognizing accretion of the asset retirement obligation would include: $29.711 $43.500 $26,740 2 points Saved On January 1, 2018, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $20,000 to be paid on December 31, 2020. The fair value of the tractor is not determinable. An interest rate of 5% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31 Question The value of the tractor purchased would be: $24,000 O $21.277 $16,000 $20,732 QUESTION 20 2 points saved On January 1, 2018. Byner Company purchased a used tractor Byner paid $4,000 down and signed a noninterest-bearing note requiring $20,000 to be paid on December 31, 2020. The fair value of the tractor is not determinable. An interest rate of 5% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31 Question Interest expense for 2019 would be: $1,000 $1,117 $864 O $007
