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A COMPANY BUYS A NEW PARCEL OF LAND. WHICH OF THE FOLLOWING ITEMS IS PROPERLY

A COMPANY BUYS A NEW PARCEL OF LAND. WHICH OF THE FOLLOWING ITEMS IS PROPERLY

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Author: Joyce Buda
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Question 1A company buys a new parcel of land. Which of the following items is properly debited to theland account?paving a road to access the landdemolishing an existing structurethe fees on a mortgage loan on the landplanting of trees and shrubsQuestion 2What type of asset is subject to depletion?natural resourcesan intangible asseta literary worka computerQuestion 3Which is NOT an intangible asset?a patent on a new inventiona copyright on a musical worka contract granting the company a right-of-wayan estimated amount of coal in a piece of owned land that has not yet been mined Question 4Which is NOT an advantage of a corporation compared with a partnership or soleproprietorship?The corporation's existence is unaffected by the death of an owner.It is easier to raise large amounts of capital.The total tax burden is lower.Owners enjoy limited liability.Question 5If a corporation's stock is purchased by the corporation on the open market but is held intreasury and not retired, which of the following is correct?A debit will be recorded to the treasury stock account, which is a liability account.A debit will be recorded to the treasury stock account, which is an equity account.A credit will be recorded to the treasury stock account, which is an equity account.A credit will be recorded to the treasury stock account, which is a liability account.Prepare the following journal entries. Dates and descriptions are not required.Question 6A company sells a fixed asset (equipment) for $30,000. The asset originally cost $80,000 andhad accumulated depreciation of $55,000 at the time of the sale. Record the journal entry torecognize the sale. Question 7A company scraps a fully depreciated piece of equipment originally costing $20,000. They didnot receive any proceeds. Record the journal entry.Question 8A company sells a piece of plant equipment for $2,000. The original cost was $10,000, andthe accumulated depreciation through the date of the sale was $6,500. Record the journalentry.Question 9A company buys a new pickup truck for $35,000 on the first day of the month. They willassume a 5-year life with a salvage value equal to 10% of the original cost. Record the firstmonthly depreciation journal entry.Question 10A company sells 200,000 shares of newly issued common stock having a par value of $1 for$8.50 per share. Record the journal entry.Question 11A company has net income of $4,580,000. There are 200,000 shares of $50 par, 6% preferredstock outstanding and 800,000 shares of common stock. What is the net income per commonshare (earnings per share)? Show your calculation. Question 12When would repair costs be capitalized?Question 13What will be the result to inventory values, cost of goods sold, and net income if the LIFOmethod is used during times of inflation?Question 14What is a contra account? Give an example.Question 15A mining company pays $10,000,000 for a piece of land that they estimate has a recoverablereserve of oil equal to 1,500,000 barrels. They estimate that they will be able to sell the landfor $500,000 after they have extracted all of the oil. In year one, the company extracts300,000 barrels of oil. They have made no prior entries for the removal of this oil. Record thejournal entry to recognize the removal of this oil.Question 16A company has 800,000 shares of common stock outstanding and no preferred stock. OnFebruary 21, the board of directors declares a 25-cents-per-share dividend, payable on March31 to shareholders of record as of March 15. Record the journal entry for the declaration ofthe dividend. Question 17A company has 800,000 shares of common stock outstanding and no preferred stock. OnFebruary 21, the board of directors declares a 25-cents-per-share dividend payable on March31 to shareholders of record as of March 15. Record the journal entry for the payment of thedividend.Question 18A corporation has 50,000 shares of $10 par common stock. A 10% stock dividend is declaredand the market value of the stock is $80 immediately before the declaration. Record thejournal entry made on the date the dividend is declared but not paid.Question 19What is the difference between a stock split and a stock dividend?Question 20A company has 150,000 shares of common stock outstanding and 10,000 shares of $100 parvalue, 5% preferred stock outstanding. The company's net income was $387,500.What are the earnings per common share? (Show your calculation.)


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