1. Which of the following should be included in the cost of land?

A.Construction cost of a parking lot

B.Landscaping

C.Real estate brokerage commission

D.Lighting

2.The cost of installing shrubbery should be recorded as:

A.land

Bl.and improvements

C.land maintenance expense.

D.land improvement expense.

3.Land, buildings and equipment are acquired for a lump sum of $875,000. The market values of the threeassets are, respectively, $200,000, $500,000 and $300,000. What is the cost assigned to the equipment?

A.$250,000

B.$262,500

C.$300,000

D.$342,857

4.Land is purchased for $62,500. Back taxes paid by the purchaser were $7,500; total costs to demolish anexisting building were $11,000; fencing costs were $12,500; and lighting costs were $1,500. What is thecost of the land?

A.$62,500

B.$81,000

C.$93,500

D.$95,000

5.Which of the following should be included in the Machinery account?

A.The cost of transporting the machinery to its setup location

B.The cost of a maintenance insurance plan after the machinery is up and running

C.The cost of calibrating the machinery after it has been used for a year

D.The cost of insurance while the machinery is being overhauled

6.Morton Corporation purchased equipment for $46,000. Morton also paid $1,200 for freight and insurance while the equipment was in transit. Sales tax amounted to $850. Insurance, taxes and maintenance for the first year of use was $1,000. How much should Morton Corporation capitalize as the cost of the equipment?

A.$46,000

B.$46,850

C.$48,050

D.$49,050

7.A company recently purchased a building that it plans to renovate to get ready for use in its operations.All expenditures to repair and renovate the existing building for its intended use are charged to:

A.land

B.land improvements

C.land improvements expense

D.building

8.Maxco Company acquired land and buildings for $1,000,000. The land is appraised at $450,000 and thebuildings are appraised at $800,000. The debits to the Land and Buildings accounts will be:

A.Land $360,000; Building $640,000.

B.Land $500,000; Building $500,000.

C.Land $450,000; Building $800,000.

D.Land $562,500; Building $437,500.

9.Bixby Corporation purchased land and a building for $800,000. An appraisal indicates that the land's value is $400,000 and the building's value is $500,000. When recording this transaction Galaxy should debit:

A.Land for $800,000.

B.Building for $355,555.

C.Land Improvement-Building for $500,000.

D.Building for $444,444.

10.Costs that do not extend the asset's capacity or its useful life, but merely maintain the asset or restore it to working order are recorded as:

A.capital expenditures.

B.expenses

C.additions

D.improvements

11.On June 1, Puff's Trucking Company paid $3,000 to overhaul the engine on a delivery truck to allow it to be used for two additional years.It also paid $75 for an oil change on the truck.Which of the following statements is true?

A.The $3,000 is a capital expenditure and the $75 is an expense.

B.The $3,000 is an expense and the $75 is a capital expenditure.

C.Both items are capital expenditures.

D.Both items are expenses.

12.Double-declining balance depreciation:

A.is an accelerated method of depreciation.

B.ignores the residual value in computing depreciation, except during the last year.

C.is based on book value.

D.is all of the above.

13.On January 2, 20X6, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000. If KJ Corporation uses the units of production method of depreciation, what will be the debit to Depreciation Expense for the year ended December 31, 20X7assuming that during this period, the asset was used 8,250 hours?

A.$48,000

B.$49,500

C.$51,500

D.$53,625

14.On January 2, 20X6, KJ Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is $20,000.What is the balance in Accumulated Depreciation on December 31, 20X7, if KJ Corporation uses the straight-line method of depreciation?

A.$96,000

B.$49,500

C.$51,500

D.$53,625

15.Southern's Pizza bought a used Nissan delivery van on January 2, 20X6, for 19,500. The van was expected to remain in service four years (30,000 miles). At the end of its useful life, Southern's officials estimated that the van's residual value would be 2,700. The van traveled 7,000 miles the first year, 9,500 miles the second year, 4,500 miles the third year, and 9,000 miles the fourth year. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. (For units-of-production and double-declining-balance, round to the nearest two decimals after each step of the calculation.)