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31 tanner company acquired equipment 1 equipment 2 and equipment 3 for 600 000 equip 4297910


31) Tanner Company acquired equipment #1, equipment #2, and equipment #3, for $600,000. Equipment #1 is appraised at $240,000, equipment # 2 is appraised at $310,000 and equipment #3 is appraised for $110,000.The cost of equipment #2 is:

A) $220,218.

B) $200,000.

C) $281,818.

D) $310,000.

32) 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.

33) The Spa Company purchased land, buildings and equipment for $830,000. The land has been appraised at $300,000, the buildings at $510,000 and the equipment at $90,000. The journal entry to record this transaction will include a debit to:

A) land for $300,000.

B) land for $470,333.

C) building for $470,333.

D) equipment for $276,667.

34) A machine is purchased for $70,000. The transportation costs were $4,000, installation costs were $1,000 and taxes on the purchase price were $700. The cost basis of the machine is:

A) $70,000.

B) $74,000.

C) $75,700.

D) none of the above.

35) The Meat Company purchased assets for a lump sum price of $1,000,000. The assets purchased had an appraised value of:





Prepare the appropriate journal entry if The Meat Company paid cash for this transaction.







































































































36) Auto Shop, Inc., incurred the following costs in acquiring plant assets:

a.Purchased land for a $100,000 down payment and signed a $75,000 note payable for the balance.

b.Delinquent property tax of $2,500 and legal fees of $1,000 had to be paid before the land could be purchased.

c.$12,000 was paid to demolish an unwanted building on the land.

d.Architect fee of $7,000 was paid for the design of a new office building.

e.An office building was constructed at a cost of $500,000.

f.Interest cost on a construction loan for the building totaled $6,000

g.$17,500 was paid for fencing, $12,000 was paid for landscaping, and $55,000 was paid for paving the parking lot.

Determine the cost of the land, land improvements, and building.

37) Determine the cost of the land, based upon the following data:


Purchase price of the land$210,000

Survey fees1,000


Payment for demolition of old building on land30,000

Back property taxes2,000

Paving parking lot40,000


38) Determine the cost of the dump truck, based upon the following data:


Purchase price of the dump truck$130,000

Sales tax6,500

Delivery charge1,300

Special wheels for the truck to be installed by the dealer3,000

Normal repairs to the machine after it has been in use1,100



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