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MULTIPLE CHOICE QUESTIONS 1. A company purchased land for $72,000 cash. Real estate brokers commission...

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MULTIPLE CHOICE QUESTIONS 1. A company purchased land for $72,000 cash. Real estate brokers commission was $5,000 and $7,000 was spent for demolishing an old building on the land construction of a new building could start. Proceeds from salvage of the e af a. $82,800 b. $72,000. c. $77,800 d. $84,000. before would be recorded at 2. Carpino Company purchased equipment and these costs were incurred Cash price Sales taxes Insurance during transit Installation and testing Total costs $90,000 4,500 750 $96,750 What amount should be recorded as the cost of the equipment? a. $90,000. b. $94,500. c. $95,250. d. $96,750. All leases are classified as either a. capital leases or long-term leases. b. capital leases or operating leases. c. operating leases or current leases, d. long-term leases or current leases. 3. The cost of a long-term asset is expensed a. when it is paid for b. as the asset benefits the company. 4. c. in the period in which it is acquired d. in the period in which it is disposed of. 5. Depreciation is a process of a. asset devaluation. b. cost accumulation c. cost allocation. d. asset valuation

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