2c-blank-green-sheet

School: University of Illinois, Chicago - Course: ACCY 202 - Subject: Accounting

Module 2C 1.Property, plant and equipment are: A.Tangible assets used in the operation of a business that have a useful life of more than one accounting period. B.Current assets. C.Held for sale. D.Intangible assets used in the operations of a business that have a useful life of more than one accounting period. E.Tangible assets used in the operation of business that have a useful life of less than one accounting period. 2.The cost of land can include: A.Purchase price. B.Assessments by local governments. C.Costs of removing existing structures. D.Fees for insuring the title. E.All of these. 3.A company purchased property for a building site. The costs associated with the property were: Purchase Price$175,000 Real Estate Commissions15,000 Legal Fees800 Expenses of clearing the land2,000 Expenses to remove old building1,000 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building? A.$175,800 to Land; $18,800 to Building. B.$190,000 to Land; $3,800 to Building. C.$190,800 to Land; $1,000 to Building. D.$192,800 to Land; $0 to Building. E.$193,800 to Land; $0 to Building. 4.A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $62,000; the land at $45,000, and the parking lot at $18,000. Land should be recorded in the accounting records with an allocated cost of: A. $0B. $36,000 C. $42,000 D. $45,000 E. $100,000 Page 321 Downloaded by Burbank England ([email protected])lOMoARcPSD|20851058

5.Marble Company purchased a machine costing $120,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $2,000. The machine requires special mounting and wiring connections costing $10,000. When installing the machine, $1,300 in damages occurred. Materials costing $1,500 are used in testing and adjusting the machine to produce a satisfactory product. Compute the cost recorded for this machine assuming Marble paid within the discount period. A. $131,100B. $134,800C. $132,300D. $133,600 E. $130,300 6.Revenue expenditures: A.Are costs incurred during the life of the asset that do not materially increase the asset's life or its productive capabilities. B.Are known as balance sheet expenditures. C.Extend the asset's useful life. D.Substantially benefit future periods. E.Are debited to asset accounts. 7.Ordinary repairs: A.Are expenditures to keep an asset in normal operating condition. B.Are necessary if an asset is to perform to expectations over its useful life. C.Are treated as expenses. D.Include cleaning, lubricating, and normal adjusting. E.All of these. 8.Select the true statement below: A.If a machine is damaged during its regular weekly cleaning, the cost of the repairs are capitalized. B.If land is purchased as a building site, the cost of removing existing structures is not charged to the Land account. C.When a company constructs a building, the cost of the building includes the tax penalty paid to the county collector as a result of late tax filings. D.All of the above are true. E.All of the above are false.