Exam 9: Fixed Assets and Intangible Assets

What is the cost of the land, based upon the following data? Land purchase price $178,000 Broker's commission 15,000 Payment for the demolition and removal of existing building 5,000 Cash received from the sale of materials salvaged from the demolished building 2,000

Journalize each of the following transactions: a) A wing costing $2,345,000 was added to the building. A new mortgage was issued for the cost. b) Equipment was upgraded to increase its capacity to produce widgets. The upgrade cost of $11,500 was paid in cash. c) A major overhaul costing $8,000 on a machine increased the useful life by 4 years. The payment was made in cash.

When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements.

On October 1, Sebastian Company acquired new equipment with a fair market value of $458,000. Sebastian received a trade-in allowance of $92,000 on the old equipment of a similar type and paid cash of $366,000. The following information about the old equipment is obtained from the account in the equipment ledger: Cost, $336,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $220,000; annual depreciation, $20,000. Assuming the exchange has commercial substance, journalize the entries to record: a) the current depreciation of the old equipment to the date of trade-in and b) the exchange transaction on October 1.

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis of

Classify each of the following costs associated with long-lived assets as one of the following: -Interest on money borrowed to finance construction of new office building