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    Intermediate Accounting-12th ED (KIESO, WEYGANDT, and WARFIELD)

    1. Chapter 10 #4 Indicate where the following items would be shown on
    a balance sheet.
    (a) A lien that was attached to the land when purchased.
    (b) Landscaping costs.
    (c) Attorney's fees and recording fees related to purchasing
    (d) Variable overhead related to construction of machinery.
    (e) A parking lot servicing employees in the building.
    (f) Cost of temporary building for workers during construction
    of building.
    (g) Interest expense on bonds payable incurred during
    construction of a building.
    (h) Assessments for sidewalks that are maintained by the
    (i) The cost of demolishing an old building that was on
    the land when purchased.

    2. BE11-2 Cheetah Company purchased machinery on January 1, 2007, for $60,000. The machinery is estimated
    to have a salvage value of $6,000 after a useful life of 8 years. (a) Compute 2007 depreciation expense
    using the straight-line method. (b) Compute 2007 depreciation expense using the straight-line
    method assuming the machinery was purchased on September 1, 2007.

    3. BE7-4 Battle Tank, Inc. had net sales in 2007 of $1,200,000. At December 31, 2007, before adjusting entries,
    the balances in selected accounts were: Accounts Receivable $250,000 debit, and Allowance for Doubtful
    Accounts $2,100 credit. If Battle Tank estimates that 2% of its net sales will prove to be uncollectible,
    prepare the December 31, 2007, journal entry to record bad debt expense.

    4. BE21-3 Rick Kleckner Corporation recorded a capital lease at $200,000 on January 1, 2008. The interest
    rate is 12%. Kleckner Corporation made the first lease payment of $35,947 on January 1, 2008. The lease
    requires eight annual payments. The equipment has a useful life of 8 years with no salvage value. Prepare
    Kleckner Corporation's December 31, 2008, adjusting entries.

    5. BE8-2 Alanis Morrissette Company uses a perpetual inventory system. Its beginning inventory consists
    of 50 units that cost $30 each. During June, the company purchased 150 units at $30 each, returned 6 units
    for credit, and sold 125 units at $50 each. Journalize the June transactions.

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