1. Stone Company acquires land for $90,000 cash. Additional costs are as follows:

Demolish small building on land 2,500

Filling and grading 1,750

Salvage value of lumber of building 500

Broker commission 1,200

Landscaping (bushes, flowers, etc.) 5,000

Closing costs 900

Hull will record the acquisition cost of the land as

a. $90,000.

b. $92,500.

c. $95,000.

d. $95,850.

2. .Green Company purchases a new delivery truck for $42,500. The sales taxes are $3,500. The logo of the company is painted on the side of the truck for $1,200. The truck license is $175. The truck undergoes safety testing for $250. What does Green record as the cost of the new truck?

a. $42,500

b. $46,000

c. $47,450

d. $47,625

3. NEIU Company purchased a new van for office supplies deliveries on January 1, 2020. The van cost $40,000 with an estimated life of 5 years and $12,500 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the depreciation expense for 2021 (second year)?

a. $5,500

b. $8,000

c. $9,600

d. $16,000

4. A company sells a plant asset which originally cost $250,000 for $100,000 on December 31, 2020. The Accumulated Depreciation account had a balance of $175,000 after the current year's depreciation of $45,000 had been recorded. The entry to record the sale is:

a. Cash 100,000

Equipment 250,000

Accumulated Depreciation 175,000

Gain on Sale 175,000

b. Cash 100,000

Accumulated Depreciation 175,000

Equipment 250,000

Gain on Sale 25,000

c. Cash 100,000

Equipment 250,000

Accumulated Depreciation 175,000

Loss on Sale 175,000

d. Cash 100,000

Accumulated Depreciation 175,000

Equipment 250,000

Loss on Sale 25,000

5. A coal company invests $12 million in a mine estimated to have 15 million tons of coal and $2,000,000 salvage value. It is expected that the mine will be in operation for 5 years. In the second year,500,000 tons of coal are extracted and sold. What is the depletion expense for the second year?

a. $750,000

b. $300,000

c. $75,000

d. Cannot be determined from the information provided.