EXAM 3 MINI

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $60,000; the land at $46,600, and the parking lot at $18,400. Land should be recorded in the accounting records with an allocated cost of:

• $100,000.

• • 
    

    $0.

• $37,280.

• $46,600.

• • 
    

    $43,280.

If land is purchased as a building site, the cost of removing existing structures, less amounts recovered through the sale of salvaged materials, is recorded on the income statement as an expense.

• True

• False

An asset's book value is $14,400 on January 1, Year 6. The asset is being depreciated $200 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $9,300, the company should record:

• A loss on sale of $750.

• A loss on sale of $1,500.

• A gain on sale of $750.

• A gain on sale of $1,500.

• • 
    

    Neither a gain or loss is recognized on this type of transaction.

The interest accrued on $5,400 at 7% for 60 days is:

Note: Use 360 days a year.

• 441

• 189

• 44

• 38

• 63

If a sale is made with a bank credit card, the seller debits Cash and credits Sales for the same amount.

• TRUE

• FALSE