Instructions Solve the following 25 problems. Write all your


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Need help with the question attached. This is for Intermediate Accounting II (Kieso, Don. Weygandt, Jerry. Warfield, Terry. Copyright 2012. Intermediate Accounting, 14th Edition) Module 11.docx Instructions Solve the following 25 problems. Write all your solutions on this sheet. In addition, write your calculations or rationale for your answer on this sheet. In other words, it’s not enough to give the correct answer. You must also show why your answer is correct through your calculations or rationale. The spaces expand as you write. Each problem is worth 4 points. Problems 1. Holiday Laboratories purchased a high speed industrial centrifuge at a cost of $420,000. Shipping costs totaled $15,000. Foundation work to house the centrifuge cost $8,000. An additional water line had to be run to the equipment at a cost of $3,000. Labor and testing costs totaled $6,000. Materials used up in testing cost $3,000. The capitalized cost is: A. $455,000. B. $446,000. C. $437,000. D. $435,000. Calculations: Correct Answer: 2. Vijay Inc. purchased a 3­acre tract of land for a building site for $320,000. On the land was a building with an appraised value of $120,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title insurance was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period subsequent to the purchase date. The capitalized cost of the land is: A. $336,400. B. $336,150. C. $334,650. D. $201,150. Calculations: Final Exam Correct Answer: 3. Simpson and Homer Corporation acquired an office building on three acres of land for a lump­sum price of $2,400,000. The building was completely furnished. According to independent appraisals, the fair values were $1,300,000, $780,000, and $520,000 for the building, land, and furniture and fixtures, respectively. The initial values of the building, land, and furniture and fixtures would be: A. $1,300,000, $780,000, $520,000. B. $1,200,000, $720,000, $480,000. C. $720,000, $1,200,000, $480,000. D. These figures are not accurate ­ see my calculations for details. Calculations: Correct Answer: 4. When bonds are sold at a discount, if the annual straight­line amortization amount is compared to the annual effective interest amortization amount over the life of the bond issue, the annual amount of the straight­line amortization of discount is: A. Higher than the effective interest amount every year. B. Higher than the effective interest amount in the early years and less than the effective interest amount in the later years. C. Less than the effective interest amount in the early years and more than the effective interest amount in the later years. D. Less than the effective interest amount every year. Copyright ©2011 Rasmussen College Page 2 Final Exam Correct Answer: Rationale for Your Answer: Copyright ©2011 Rasmussen College Page 3 Final Exam 5. On January 1, 2009, Zebra Corporation issued 1,000 of its 8%, $1,000 bonds at 98. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2019. Zebra paid $50,000 in bond issue costs. Zebra uses the straight­line amortization method. What is the bond carrying value reported in the December 31, 2009, balance sheet? A. $1,045,000. B. $1,040,000. C. $987,000. D. $982,000. Calculations: Correct Answer: 6. When bonds include detachable warrants, what is the appropriate accounting for the cash proceeds from the bond issue? A. The proceeds from the bond issue are allocated between the bonds and the warrants on the basis of their relative market values. B. The proceeds from thebond issue are allocated between the bonds and the warrants on the basis of their relative face values. C. A nominal amount is allocated to the warrants. D. All of the proceeds are allocated to the bonds. Correct Answer: Rationale for Your Answer: Copyright ©2011 Rasmussen

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