Chapeter 9. Attempt 3

Which of the following is not a capital expenditure with regard to a manufacturing facility? Replacing the heating system with a more energy efficient model Replacing the air conditioning system with a similar unit Painting the exterior of the building Expanding the building by adding a new wing If an asset is sold at a gain, the fair value of the asset is greater than the proceeds received from the sale. the proceeds from the sale are greater than the asset's cost. the book value of the asset is less than the proceeds received from the sale. the cost of the asset is greater than its book value. X |ncorrect. A cost of $326200 - $248040 in accumulated depreciation (Cost, $326200 - Salvage value, $40000/ 5 years = $57240 annual depreciation x 4 years = $228960 + 2025 Depreciation, $57240 x 4/12 months, $19080) results in a book value of $78160. Adding the $8400 gain indicates sale price was $86560. Oriole Company purchased machinery for $326200 on January 1, 2021. Straight-line depreciation has been recorded based on a $40000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2025 at a gain of $8400. How much cash did Oriole receive from the sale of the machinery? $105640. $86560. $67480. $69760. On July 1, 2025, Bonita Senior Living completed the installation of a solar panel system at their location. The purchase price of the system was $220000 and installation costs amounted to $69000. How should Bonita treat this installation? Increase the existing recorded cost of the building by $289000 Increase the existing recorded cost of the building by $220000 Record a building improvement of $289000 as a separate asset Record a land improvement of $289000 as a separate asset eTextbook and Media Solutiog Assistance Used $220000 + $69000 = $289000.

Sheridan Company purchased a new machine on May 1, 2017 for $544800. At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $30000. The company has recorded monthly depreciation using the straight-line method. On March 1, 2026, the machine was sold for $68400. What should be the loss recognized from the sale of the machine? $0. $21660. $30000. $51660. eTextbook and Media *'SAonEiop; Assistance Used ($544800 - $30000) + (10 x 12) = $4290 per month $68400 - [$544800 - ($4290 x 106 mo.)] = ($21660). Which of the following statements about involuntary conversions is false? The gain or loss from an involuntary conversion is not recognized when the enterprise reinvests in replacement assets. The gain or loss from an involuntary conversion is reported as other revenues and gains or other expenses and losses. Losses equivalent to the asset's book value are recognized if the asset is abandoned. An involuntary conversion may result from condemnation or fire. Marigold Corp. purchased land as a factory site for $1305000. Marigold paid $124000 to tear down two buildings on the land. Salvage was sold for $8000. Legal fees of $5060 were paid for title investigation and making the purchase. Architect's fees were $46700. Title insurance cost $3700, and liability insurance during construction cost $4000. Excavation cost $15520. The contractor was paid $4400000. An assessment made by the city for pavement was $10000. Interest costs during construction were $257000. The cost of the building that should be recorded by Marigold Corp. is $4407220. $4419700. $4406000. $4723220. eTextbook and Media Solution Assistance Used $46700 + $4000 + $15520 + $4400000 + $257000 = $4723220.

Which of the following is not a major characteristic of a plant asset? Yields services over a number of years Acquired for resale Possesses physical substance Acquired for use Which of the following costs are capitalized for self-constructed assets? materials and overhead directly related to construction only materials and labor directly related to construction only materials, labor, and overhead directly related to construction only labor and overhead directly related to construction only v Correct! The three conditions required for the interest capitalization period to begin and continue are the expenditures for the asset have been made, the activities that are necessary to get the asset ready for its intended use are in progress, and the interest cost is being incurred. Which of the following is one of the conditions that must be present for the capitalization period of interest to begin? Activities necessary to get the asset ready for its intended use must be known. Interest costs are being incurred. The construction period must occur in the current accounting period. Expenditures for the asset must be budgeted. Sheridan Inc. and Pharoah Co. have an exchange with no commercial substance. The asset given up by Sheridan Inc. has a book value of $58500 and a fair value of $93500. The asset given up by Pharoah Co. has a book value of $123500 and a fair value of $122000. Boot of $28500 is received by Pharoah Co. What amount should Sheridan Inc. record for the asset received? $93500 $122000 $87000 $123500 eTextbook and Media Solution Assistance Used $58500 + $28500 = $87000.