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E7-3;Determine cost of land;Obj|1;? $715,725;Express Delivery Company acquired an adjacent lot to construct a new warehouse, paying $80,000 and giving a short-term note for $620,000. Legal fees paid were $1,900, delinquent taxes assumed were $9,000, and fees paid to remove an old building from the land were $6,000. Materials salvaged from the demolition of the building were sold for $1,175. A contractor was paid $800,000 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.;E7-4;Capital and revenue expenditures;Obj|1;Hometown Delivery Co. incurred the following costs related to trucks and vans used in operating its delivery service;1. Changed the oil and greased the joints of all the trucks and vans.;2. Changed the radiator fluid on a truck that had been in service for the past four years.;3. Installed a hydraulic lift to a van.;4. Installed security systems on four of the newer trucks.;5. Overhauled the engine on one of the trucks purchased three years ago.;6. Rebuilt the transmission on one of the vans that had been driven 40,000 miles. The van was no longer under warranty.;7. Removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication.;8. Repaired a flat tire on one of the vans.;9. Replaced a truck's suspension system with a new suspension system that allows for the delivery of heavier loads.;10. Tinted the back and side windows of one of the vans to discourage theft of contents.;Classify each of the costs as a capital expenditure or a revenue expenditure.;E7-8;Straight-line depreciation;Obj|2;? $3,170;A refrigerator used by a meat processor has a cost of $86,750, an estimated residual value of $7,500, and an estimated useful life of 25 years. What is the amount of the annual depreciation computed by the straight-line method?


Paper#81741 | Written in 18-Jul-2015

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