MULTIPLE CHOICE QUESTIONS
71. The cost of a purchased building includes all of the following
except
a.closing costs.
b.real estate broker's commission.
c.remodeling costs.
d.All of these answer choices are correct.
72. A company purchased land for $80,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at
a.$87,000.
b.$80,000.
c.$85,000.
d.$92,000.
73. Which one of the following items is
not
considered a part of the cost of a truck purchased for business use?
a.Sales tax
b.Accident insurance
c.Freight charges
d.Cost of lettering on side of truck
74. Which of the following assets does
not
decline in service potential over the course of its useful life?
a.Equipment
b.Furnishings
c.Land
d.Fixtures
75. The four subdivisions for plant assets are
a.land, land improvements, buildings, and equipment.
b.intangibles, land, buildings, and equipment.
c.furnishings and fixtures, land, buildings, and equipment.
d.property, plant, equipment, and land.
76. The cost of land does
not
include
a.real estate brokers' commission.
b.annual property taxes.
c.accrued property taxes assumed by the purchaser.
d.title fees.
77. Gagner Clinic purchases land for $115,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land?
a.$117,200
b.$115,000
c.$119,700
d.$117,500
78. Carey Company buys land for €50,000 on 12/31/13. As of 3/31/14, the land has appreciated in value to €50,700. On 12/31/14, the land has an appraised value of €51,600. By what amount should the Land account be increased in 2014?
a.€0
b.€700
c.€900
d.€1,600
Removal of shed$ 300
Filling and grading1,500
Salvage value of lumber of shed120
Broker commission1,530
Paving of parking lot10,000
Closing costs560
Hull will record the acquisition cost of the land as
a.$92,000.
b.$94,090.
c.$95,990.
d.$95,770.
80. Wesley Hospital installs a new parking lot. The paving cost ?40,000 and the lights to illuminate the new parking area cost ?20,000. Which of the following statements is true with respect to these additions?
a.?40,000 should be debited to the Land account.
b.?20,000 should be debited to Land Improvements.
c.?60,000 should be debited to the Land account.
d.?60,000 should be debited to Land Improvements.