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SOLUTION TO ACCT 3001 CH 10 EQAS LATEST UPDATE 2024/2025!! (VERIFIED)
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SOLUTION TO ACCT 3001 CH 10 EQAS LATEST UPDATE 2024/2025!! (VERIFIED)
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SOLUTION TO ACCT 3001 CH 10EQAS LATEST UPDATE 2024/2025!!
(VERIFIED)
D ANSWER Plant assets may properly include
a. deposits on machinery not yet received.
b. idle equipment awaiting sale.
c. land held for possible use as a future plant site.
d. None of these answers are correct
B ANSWER Which of the following is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for resale
c. Acquired for use
d. Yields services over a number of years
D ANSWER Which of these is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for use in operations
c. Yields services over a number of years
d. All of these are major characteristics of a plant asset.
C ANSWER Cotton Hotel Corporation recently purchased Emporia Hotel and the land on which it is
located with the plan to tear down the Emporia Hotel and build a new luxury hotel on the site. The cost
of the Emporia Hotel should be
a. depreciated over the period from acquisition to the date the hotel is scheduled to be torn down.
b. written off as an extraordinary loss in the year the hotel is torn down.
c. capitalized as part of the cost of the land.
d. capitalized as part of the cost of the new hotel.
, C ANSWER The cost of land does not include
a. costs of grading, filling, draining, and clearing.
b. costs of removing old buildings.
c. costs of improvements with limited lives.
d. special assessments.
C ANSWER The cost of land typically includes the purchase price and all of the following costs except
a. grading, filling, draining, and clearing costs.
b. street lights, sewers, and drainage systems cost.
c. private driveways and parking lots.
d. assumption of any liens or mortgages on the property.
D ANSWER If a corporation purchases land and building and subsequently tears down the building and
uses the property as a parking lot, the proper accounting treatment of the cost of the building would
depend on
a. the significance of the cost allocated to the building in relation to the combined cost of the land and
building.
b. the length of time for which the building was held prior to its demolition.
c. the contemplated future use of the parking lot.
d. the intention of management for the property when the building was acquired.
A ANSWER The debit for a sales tax properly levied and paid on the purchase of machinery preferably
would be a charge to
a. the machinery account.
b. a separate deferred charge account.
c. miscellaneous tax expense (which includes all taxes other than those on income).
d. accumulated depreciation--machinery.
B ANSWER Fences and parking lots are reported on the balance sheet as
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