r which each expenditure should be debited. plant, and E9-2 Adama Company incurred the following costs. 1. Sales tax on factory machinery purchased 2. Painting of and lettering on truck immediately upon purchase 3. Installation and testing of factory machinery 4. Real estate broker's commission on land purchased 5. Insurance premium paid for first year's insurance on new truck 6. Cost of landscaping on property purchased 7. Cost of paving parking lot for new building constructed 8. Cost of clearing, draining, and filling land 9. Architect's fees on self-constructed building $ 5,000 700 2,000 3,500 880 7,200 17,900 13,300 10,000 Instructions Indicate to which account Adama would debit each of the costs. on costs E9.3 On March 1, 2017, Boyd Company acquired real estate, on which it planned to con struct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,900 attorney's fee for work concern- ing the land purchase, $5,200 real estate brokers fee, $9,100 architect's fee, and $14,000 to put in driveways and a parking lot Instructions (a) Determine the amount to be reported as the cost of the land (b) For each cost not used in part (a), indicate the account to be debited. E9-4 Alysha Monet has prepared the following list of statements about depreciation. 1. Depreciation is a process of asset valuation, not cost allocation. 2. Depreciation provides for the proper matching of expenses with revenues. 3. The book value of a plant asset should approximate its fair value 4. Depreciation applies to three classes of plant assets: land, buildings, and equipment. 5. Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time. 6. The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence 7. Recognizing depreciation on an asset results in an accumulation of cash for replace- ment of the asset 8. The balance in accumulated depreciation represents the total cost that has been charged to expense since placing the asset in service. 9. Depreciation expense and accumulated depreciation are reported on the income statement. 10. Three factors affect the computation of depreciation: cost, useful life, and salvage valu Instructions Identify each statement as true or false. If false, indicate how to correct the statement E9-5 Gotham Company purchased a new machine on October 1,2017, at a cost of $90,000 The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000 working hours during its 8-year life Instructions Compute the depreciation expense under the straight-line method for 2017 a assuming a December 31 yranend d