s 1 and 2 are based on the following information: Poin Company recently incurred the following costs: (1) Purchase price of land and dilapidated building $280,000 (2) Real estate broker's commission 14,000 (3) Net demolition costs of dilapidated building 42,000 (4) Excavation costs for new building 44,000 (5) Architect's fees and building permits 35,000 (6) Costs associated with new building construction 930,000 (7) Costs associated with new furniture and equipment 250,000 (8) Actual interest costs during building construction 135,000 (9) Actual interest cost after completion of building construction 120,000 (10) Costs of walks, driveways, and parking lot 55,000 ____ 1. The building should be recorded on Poin's books at a. $ 930,000. b. $1,319,000. c. $1,144,000. d. $1,264,000. ____ 2. Land should be recorded on Poin's books at a. $280,000. b. $380,000. c. $322,000. d. $336,000. ____ 3. Jenson Supply bought equipment at a cost of $24,000 on January 2, 2002. It originally had an estimated life of ten years and a salvage value of $4,000. Jenson uses the straight-line depreciation method. On December 31, 2006, Jenson decided the useful life likely would end on December 31, 2007, with a salvage value of $2,000. The depreciation expense recorded on December 31, 2006, should be a. $2,000. b. $3,500. c. $4,000. d. $7,000. ____ 4. In order to be relevant, accounting information must a. provide a basis for forecasts. b. be verifiable. c. be neutral. d. be a faithful representation. ____ 5. Jordan Company sold old equipment for $20,000. The equipment had a cost of $50,000 and accumulated depreciation of $25,000. The entry to record the sale of the equipment would include a a. loss on disposal of $5,000. b. gain on disposal of $20,000. c. loss on disposal of $20,000. d. gain on disposal of $5,000. ____ 6. The cost of intangible assets should be a. amortized over the assets' estimated useful life. b. amortized over a period not exceeding 5 years. c. amortized over the assets' estimated useful life, or its legal life, whichever is shorter. d. charged to an expense account at acquisition. ____ 7. In a period of rising prices, the inventory method that results in the lowest income tax payment is a. average cost. b. FIFO. c. LIFO. d. specific identification. ____ 8. On November 30, Catcher Company issued a $8,000, 6%, 6-month note to the National Bank. The entry on Thatcher's books to record the payment of the note at maturity will include a credit to Cash for a. $8,000. b. $8,240. c. $8,120. d. $8,480. ____ 9. The inventory methods that result in the most current costs in the income statement and balance sheet are Income Statement Balance Sheet a. FIFO FIFO b. FIFO LIFO c. LIFO LIFO d. LIFO FIFO ____ 10. The following information is available for Righten Company: Sales $130,000 Freight-in $10,000 Ending Merchandise Inventory 15,000 Purchase Returns and Allowances 5,000 Purchases 90,000 Beginning Merchandise Inventory 12,000 Rightens cost of goods sold is a. $112,000. c. $98,000. b. $92,000. d. $107,000