ACCT 3021 : Comprehensive Exam For Ch. 10-14

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azuremammoth471

15 Mar 2019

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Problem c-i multiple choice tangible and intangible assets. Choose the best answer for each of the following questions and enter the identifying letter in the space provided. Perry corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum price of ,000. At the time of acquisition perry paid ,000 to have the assets appraised. What cost should be assigned to the land, buildings, and equipment, respectively: ,000, ,000, and ,000, ,000, ,000, and ,000, ,000, ,000, and ,000, ,000, ,000, and ,000. In accordance with gaap, the maximum period over which a patent can be amortized is: 20 years, 28 years, 40 years, 50 years. Use the following data to answer questions 5 through 9: Davis company purchased a new piece of equipment on july 1, 2012 at a cost of. The equipment has an estimated useful life of 5 years and an estimated salvage value of ,000.

Related Questions

Plant acquisitions for selected companies are as follows.

1. Pearl Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $812,000. At the time of purchase, Torresâs assets had the following book and appraisal values.

	Book Values	Appraisal Values
Land	$232,000	$174,000
Buildings	290,000	406,000
Equipment	348,000	348,000

To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made.

Land	174,000
Buildings	290,000
Equipment	348,000
Cash		812,000

2. Martinez Enterprises purchased store equipment by making a $2,320 cash down payment and signing a 1-year, $26,680, 10% note payable. The purchase was recorded as follows.

Equipment	31,668
Cash		2,320
Notes Payable		26,680
Interest Payable		2,668

3. Sandhill Company purchased office equipment for $18,000, terms 2/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was:

Equipment	18,000
Cash		17,640
Purchase Discounts		360

4. Teal Inc. recently received at zero cost land from the Village of Cardassia as an inducement to locate its business in the Village. The appraised value of the land is $31,320. The company made no entry to record the land because it had no cost basis.

5. Flint Company built a warehouse for $696,000. It could have purchased the building for $858,400. The controller made the following entry.

Buildings	858,400
Cash		696,000
Profit on Construction		162,400

Prepare the entry that should have been made at the date of each acquisition

crimsonbear193

Pearl Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $170,000 cash. The following information was gathered. Description Initial Cost on Sellerâs Books Depreciation to Date on Sellerâs Books Book Value on Sellerâs Books Appraised Value Machinery $170,000 $85,000 $85,000 $153,000 Equipment 102,000 17,000 85,000 51,000 Asset 3: This machine was acquired by making a $17,000 down payment and issuing a $51,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $25,500 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $61,030. Asset 4: This machinery was acquired by trading in used machinery. (The exchange lacks commercial substance.) Facts concerning the trade-in are as follows. Cost of machinery traded $170,000 Accumulated depreciation to date of sale 68,000 Fair value of machinery traded 136,000 Cash received 17,000 Fair value of machinery acquired 119,000 Asset 5: Equipment was acquired by issuing 100 shares of $14 par value common stock. The stock had a market price of $19 per share. Construction of Building: A building was constructed on land purchased last year at a cost of $255,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date Payment 2/1 $204,000 6/1 612,000 9/1 816,000 11/1 170,000 To finance construction of the building, a $1,020,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $340,000 of other outstanding debt during the year at a borrowing rate of 8%. Record the acquisition of each of these assets. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

greenguinea-pig705

The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Thompson has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):

Depreciation is computed from the first of the month of acquisition to the first of the month of disposition.

Land A and Building A were acquired from a predecessor corporation. Thompson paid $812,500 for the land and building together. At the time of acquisition, the land had a fair value of $72,000 and the building had a fair value of $828,000.

Land B was acquired on October 2, 2016, in exchange for 3,000 newly issued shares of Thompsonâs common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $25 per share. During October 2016, Thompson paid $10,400 to demolish an existing building on this land so it could construct a new building.

Construction of Building B on the newly acquired land began on October 1, 2017. By September 30, 2018, Thompson had paid $210,000 of the estimated total construction costs of $300,000. Estimated completion and occupancy are July 2019.

Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $16,000 and the residual value at $2,000.

Machine Aâs total cost of $110,000 includes installation charges of $550 and normal repairs and maintenance of $11,000. Residual value is estimated at $5,500. Machine A was sold on February 1, 2018.

On October 1, 2017, Machine B was acquired with a down payment of $4,000 and the remaining payments to be made in 10 annual installments of $4,000 each beginning October 1, 2018. The prevailing interest rate was 8%.

Required:
Supply the correct amount for each answer box on the schedule. (Round your final answer to nearest whole dollar.)

THOMPSON CORPORATION

Fixed Asset and Depreciation Schedule

For Fiscal Years Ended September 30, 2017, and September 30, 2018

Estimated Life in Years

Depreciation for Year Ended 9/30

2017