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Accounting questions

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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The solution explains various questions in accounting