12) Bingo Corporation has acquired a property that included be th land and a bui
ID: 2573318 • Letter: 1
Question
12) Bingo Corporation has acquired a property that included be th land and a building for $500,000 The corporation hired an appraiser who has determined that the market value of the land is $360,000 and that of the building is $420,000. At cost of the building? (Round any intermediate calculations to two what amount should the corporation record the decimal places, and your final answer to the nearest dollar.) A) 5320,000 B) $226,800 C) $250,000 D) 5270,000 13) Which of the following costs related to a business car would be capitalized? 13) A) the cost to change the oll B) the cost of new tires C) the cost to install an engine with higher horsepower D) the cost to replace a broken windshield 14) 6) The expected cash value of an asset at the end of its usefal life is known as B) book value A) carrying value C) residual value D) market value Conel Sales sold its old office famiture for $6,500 The original cost was $15,000, and at sale, accumalated depreciation was $14,000. What is the effect of this transaction? B) loss of $6,500 C) loss of $5,500D) gain of $6,500 A) gain of $5,500 16) Businesses record goodwill 16) A) when they enjoy an outstanding reputation and loyalty with customers B) if their market value has increased significantly in the recent years C) when they continue the business of an acquired corporation D) if they acquire another company at an amount higher than the market value of its net assets 17) Which of the following itens should be amortized? 17) A) natural resources B) patents, copyrights, trademarks O) tangible property, plant, and equipment, other than land D) goodwill 15) Pluto Corp sold goads, with a selling price of $17221, for cash. The state sales tax rate is 8%. What15) amount is credited to the Sales Revenue account? A) $1.378 B) $17.221 C) $15.843 D) 518,599 19) Which of the following accounts is credited by the seller when tax is collected on retail sales? 19) A) Accounts Payable C) Payroll Tax B) Unearned Revenue D) Sales Tax Payable 0) Uneaned revense, for services to be performed in six months, appears on the balance sheet as 20) A) long-term assets C) current iabilities B) current assets D) long-term investmentsExplanation / Answer
12 Answer: D) 270,000
Explanation : Building percentage of total value = 420,000/(360,000+420,000) = 0.54
Cost of the Building = Lumpsum purchase price × Building percentage of total value
= 500,000 × 0.54 = 270,000
13) Answer: C) the cost to install an engine with higher horsepower
14) Answer: C) Residual Value
15) Answer: A) Gain of $5,500
Explanation : $15,000 ( Original Cost) - $14,000 ( Accumulated Depreciation ) = $1,000
As it has sold it for $6,500. So, $6,500 - $1000 = $5,500 as Corel has profited from the $5,500
16) Answer: D) If they acquire another company at an account higher than the market value of its net assets
17) Answer: B) Patents, Copyrights, trademarks
18) Answer: B) 17,221
Explanation : Cash = $18,599
Sales Revenue = $17,221
Sales Tax Payable ($17,221 × 8%) = $1,378
Therefore the amount that needs to be credited to the sales revenue account is $17,221
19) Answer: D) Sales Tax Payable
20) Answer: C) Current liabilities
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