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     80.     Carly Corporation purchased a new machine on October 31, 2007. A $1,200 down payment was made and three monthly installments of $3,600 each are to be made beginning on November 30, 2007. The cash price would have been $11,600. Carly paid no installation charges under the monthly payment plan but a $200 installation charge would have been incurred with a cash purchase. The amount to be capitalized as the cost of the machine on October 31, 2007 would be
a.     $12,200.
b.     $12,000.
c.     $11,800.
d.     $11,600.

     81.     Taylor Company buys a delivery van with a list price of $30,000. The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days. Sales taxes amount to $400 and the company paid an extra $300 to have a special horn installed. What should be the recorded cost of the van?

a.     $24,990.
b.     $25,645.
c.     $25,690.
d.     $25,390.

     82.     On August 1, 2007, Limon Corporation purchased a new machine on a deferred payment basis. A down payment of $3,000 was made and 4 monthly installments of $2,500 each are to be made beginning on September 1, 2007. The cash equivalent price of the machine was $12,000. Limon incurred and paid installation costs amounting to $500. The amount to be capitalized as the cost of the machine is
a.     $12,000.
b.     $12,500.
c.     $13,000.
d.     $13,500.

     83.     On April 1, Renner Corporation purchased for $855,000 a tract of land on which was located a warehouse and office building. The following data were collected concerning the property:
     Current Assessed Valuation     Vendor’s Original Cost
Land     $300,000     $280,000
Warehouse     200,000     180,000
Office building      400,000      340,000
     $900,000     $800,000
What are the appropriate amounts that Renner should record for the land, warehouse, and office building, respectively?
a.     Land, $280,000; warehouse, $180,000; office building, $340,000.
b.     Land, $300,000; warehouse, $200,000; office building, $400,000.
c.     Land, $299,250; warehouse, $192,375; office building, $363,375.
d.     Land, $285,000; warehouse, $190,000; office building, $380,000.

     84.     On August 1, 2007, Tanner Corporation purchased a new machine on a deferred payment basis. A down payment of $2,000 was made and 4 annual installments of $6,000 each are to be made beginning on September 1, 2007. The cash equivalent price of the machine was $23,000. Due to an employee strike, Tanner could not install the machine immediately, and thus incurred $300 of storage costs. Costs of installation (excluding the storage costs) amounted to $800. The amount to be capitalized as the cost of the machine is
a.     $23,000.
b.     $23,800.
c.     $24,100.
d.     $26,000.

     85.     Herman Company exchanged 400 shares of Daily Company common stock, which Herman was holding as an investment, for equipment from West Company. The Daily Company common stock, which had been purchased by Herman for $50 per share, had a quoted market value of $58 per share at the date of exchange. The equipment had a recorded amount on West's books of $21,000. What journal entry should Herman make to record this exchange?

     a.     Equipment           20,000
               Investment in Daily Co. Common Stock                20,000
     b.     Equipment           21,000
               Investment in Daily Co. Common Stock                20,000
               Gain on Disposal of Investment                1,000
     c.     Equipment           21,000
          Loss on Disposal of Investment           2,200
               Investment in Daily Co. Common Stock                23,200
     d.     Equipment           23,200
               Investment in Daily Co. Common Stock                20,000
               Gain on Disposal of Investment                3,200

     86.     On January 2, 2007, Quick Delivery Company traded in an old delivery truck for a newer model. The exchange lacked commercial substance. Data relative to the old and new trucks follow:
Old Truck
Original cost     $24,000
Accumulated depreciation as of January 2, 2007     16,000
Average published retail value     7,000
New Truck
List price     $40,000
Cash price without trade-in     36,000
Cash paid with trade-in     30,000
What should be the cost of the new truck for financial accounting purposes?
a.     $30,000.
b.     $36,000.
c.     $38,000.
d.     $40,000.

     87.     On December 1, 2007, Fiene Company acquired a new delivery truck in exchange for an old delivery truck that it had acquired in 2004. The old truck was purchased for $35,000 and had a book value of $13,300. On the date of the exchange, the old truck had a market value of $14,000. In addition, Fiene paid $45,500 cash for the new truck, which had a list price of $63,000. The exchange lacked commercial sunstance. At what amount should Fiene record the new truck for financial accounting purposes?
a.     $45,500.
b.     $58,800.
c.     $59,500.
d.     $63,000.

Use the following information for questions 88 and 89.
A machine cost $120,000, has annual depreciation of $20,000, and has accumulated depreciation of $90,000 on December 31, 2006. On April 1, 2007, when the machine has a market value of $27,500, it is exchanged for a machine with a fair value of $135,000 and the proper amount of cash is paid. The exchange lacked commercial substance.

     88.     The gain to be recorded on the exchange is
a.     $0.
b.     $2,500 gain.
c.     $5,000 gain.
d.     $15,000 gain.
     89.     The new machine should be recorded at
a.     $107,500.
b.     $122,500.
c.     $132,500.
d.     $135,000.

Use the following information for questions 90 and 91.

Equipment that cost $66,000 and has accumulated depreciation of $30,000 is exchanged for equipment with a fair value of $48,000 and $12,000 cash is received. The exchange lacked commercial substance.

     90.     The gain to be recognized from the exchange is
a.     $4,800 gain.
b.     $6,000 gain.
c.     $18,000 gain.
d.     $24,000 gain.

     91.     The new equipment should be recorded at
a.     $48,000.
b.     $36,000.
c.     $30,000.
d.     $28,800.

Use the following information for questions 92 through 94.

Two independent companies, Mintz Co. and Pine Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained:
               Mintz's Land     Pine's Land
          Cost and book value     $192,000     $120,000
          Fair value based upon appraisal     240,000     210,000

     The exchange was made, and based on the difference in appraised fair values, Pine paid $30,000 to Mintz. The exchange lacked commercial substance.

     92.     For financial reporting purposes, Mintz should recognize a pre-tax gain on this exchange of
a.     $0.
b.     $6,000.
c.     $30,000.
d.     $48,000.

     93.     The new land should be recorded on Mintz's books at
a.     $168,000.
b.     $192,000.
c.     $210,000.
d.     $240,000.


     94.     The new land should be recorded on Pine's books at
a.     $120,000.
b.     $150,000.
c.     $210,000.
d.     $240,000.

     95.     Hinrich Company traded machinery with a book value of $120,000 and a fair value of $200,000. It received in exchange from Noach Company a machine with a fair value of $180,000 and cash of $20,000. Noach’s machine has a book value of $190,000. What amount of gain should Hinrich recognize on the exchange?
a.     $ -0-
b.     $8,000
c.     $20,000
d.     $80,000

     96.     Noach Company traded machinery with a book value of $190,000 and a fair value of $180,000. It received in exchange from Hinrich Company a machine with a fair value of $200,000. Noach also paid cash of $20,000 in the exchange. Hinrich’s machine has a book value of $190,000. What amount of gain or loss should Noach recognize on the exchange?
a.     $20,000 gain
b.     $ -0-.
c.     $1,000 loss
d.     $10,000 loss

     97.     Marlin Company traded machinery with a book value of $180,000 and a fair value of $300,000. It received in exchange from Keach Company a machine with a fair value of $270,000 and cash of $30,000. Keach’s machine has a book value of $285,000. What amount of gain should Marlin recognize on the exchange?
a.     $ -0-
b.     $12,000
c.     $30,000
d.     $120,000

     98.     Keach Company traded machinery with a book value of $285,000 and a fair value of $270,000. It received in exchange from Marlin Company a machine with a fair value of $300,000. Keach also paid cash of $30,000 in the exchange. Marlin’s machine has a book value of $285,000. What amount of gain or loss should Keach recognize on the exchange?
a.     $30,000 gain
b.     $ -0-
c.     $1,500 loss
d.     $15,000 loss

     99.     Bobby Jenks Company purchased machinery for $160,000 on January 1, 2004. Straight-line depreciation has been recorded based on a $10,000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2008 at a gain of $3,000. How much cash did Bobby Jenks receive from the sale of the machinery?
a.     $23,000
b.     $27,000
c.     $33,000
d.     $43,000
     100.     Morganstern Company purchased machinery for $320,000 on January 1, 2004. Straight-line depreciation has been recorded based on a $20,000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2008 at a gain of $6,000. How much cash did Morganstern receive from the sale of the machinery?
a.     $46,000.
b.     $54,000.
c.     $66,000.
d.     $86,000.

     101.     Jeter Company purchased a new machine on May 1, 1998 for $176,000. At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $8,000. The company has recorded monthly depreciation using the straight-line method. On March 1, 2007, the machine was sold for $24,000. What should be the loss recognized from the sale of the machine?
a.     $0.
b.     $3,600.
c.     $8,000.
d.     $11,600.

     102.     On January 1, 1999, Hite Corporation purchased for $152,000, equipment having a useful life of ten years and an estimated salvage value of $8,000. Hite has recorded monthly depreciation of the equipment on the straight-line method. On December 31, 2007, the equipment was sold for $28,000. As a result of this sale, Hite should recognize a gain of
a.     $0.
b.     $5,600.
c.     $13,600.
d.     $28,000.

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