4.For each cost that appears in items 1 through 6 below, select the account in which it would be included and reported from those listed in
a
through
c.
You may use more than one answer for each cost. If the cost is not capitalized, place an X in the space provided.
Accounts
|
a.Land
|
b.Buildings
|
c.Equipment
|
_____1.Installation costs of a special attachment to newly acquired equipment
_____2.Freight costs for shipping the equipment into our manufacturing facility
_____3.Costs of repairing a hole knocked in the wall during installation of new equipment
_____4.Interest costs on a mortgage loan used to purchase a newly acquired building
_____5.Property taxes paid on land for the current year on which a new building was erected
_____6.Training session to teach faculty how to use computer projection equipment recently installed in classrooms
5.Select the method of depreciation listed in
a
through
c
that is best for each purpose listed in items 1 through 5.
Methods
|
a.Straight-line
|
b.Units-of-production
|
c.Double-declining-balance
|
1._______Creates the largest net income in the early years of life
2._______Erratic due to unpredictable sales levels
3._______Creates the smallest taxable income in the early years of life
4._______Technological competitive changes are rapid