11) Which of the following would
not
be included in the Machinery account?
A) cost of transporting the machinery to its setup location
B) cost of a maintenance insurance plan after the machinery is up and running
C) cost of installing the machinery
D) cost of insurance while the machinery is in transit
12) Bavarian Purity Corporation purchased equipment for $32,000. Bavarian Purity also paid $400 for freight and insurance while the equipment was in transit. Sales tax amounted to $240. Insurance, taxes, and maintenance the first year of use cost $1,000. How much should Bavarian Purity Corporation capitalize as the cost of the equipment?
A) $32,000
B) $32,400
C) $32,640
D) $31,640
13) The removal of an old building to make land suitable for its intended use is charged to:
A) land
B) land improvements
C) land improvements expense
D) renovation and restoration expense
14) Grasshopper Room Company acquired land and buildings for $1,500,000. The land is appraised at $475,000 and the buildings are appraised at $775,000. The debit to the Buildings account will be:
A) $930,000
B) $775,000
C) $1,025,000
D) $570,000
15) Which expense below would
not
be considered part of the cost of a tangible long-lived asset?
A) the price paid for the capital asset when purchased from the manufacturer
B) taxes paid on the purchase price of the capital asset
C) commissions paid to the salesperson that sold the capital asset
D) repaving a driveway to the building where the capital asset is housed
16) The Loft Corporation purchased land and a building for $700,000. An appraisal indicates that the land's value is $400,000 and the building's value is $350,000. The amount that The Loft Corporation should debit to the Building account is:
A) $326,667
B) $350,000
C) $373,333
D) $375,000
17) The Warthog Company purchased land, buildings, and equipment for $2,400,000. The land has been appraised at $865,000, the buildings at $1,175,000, and the equipment at $510,000. The equipment account will be debited for:
A) $525,000
B) $500,000
C) $480,000
D) $410,156
18) A major expenditure made to equipment that extends its useful life beyond the original estimate is journalized by:
A) crediting Depreciation Expense
B) debiting Equipment
C) debiting Depreciation Expense
D) debiting Repair Expense
19) Expenditures that increase the efficiency of an asset or extend its useful life are referred to as:
A) immediate expenses
B) capital expenditures
C) equity expenditures
D) matching expenditures
20) Expenditures of a periodic, routine nature incurred to maintain the asset in its existing condition are referred to as:
A) capital expenditures
B) equity expenditures
C) matching expenditures
D) immediate expenses