Question

1/ Bloomington Inc. exchanged land for equipment and $2,900 in cash. The book value and the fair value of the land were $104,900 and $89,200, respectively.

Assuming that the exchange has commercial substance, Bloomington would record equipment and a gain/(loss) of:

	Equipment				Gain/(loss)
a.	$	86,300			$	2,900
b.	$	104,900			$	(2,900	)
c.	$	86,300			$	(15,700	)
d.	None of these answer choices are correct.

Multiple Choice

• Option A

• Option B

• Option C

• Option D

2/ Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $181,000 with terms of 4/15, n/45. Payment was made within the discount period. Shipping costs were $4,400, which included $380 for insurance in transit. Installation costs totaled $12,500, which included $5,200 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10-ton draw press is:

Multiple Choice

• $190,660.

• $195,660.

• $194,160.

• $188,660.

3/ The balance sheets of Davidson Corporation reported net fixed assets of $344,000 at the end of 2018. The fixed-asset turnover ratio for 2018 was 4.0, and sales for the year totaled $1,492,000. Net fixed assets at the end of 2017 were:

Multiple Choice

• $431,000.

• $373,000.

• $402,000.

• None of these answer choices are correct.

4/ Liddy Corp. began constructing a new warehouse for its operations during the current year. In the year Liddy incurred interest of $20,000 on a working capital loan, and interest on a construction loan for the warehouse of $80,000. Interest computed on the average accumulated expenditures for the warehouse construction was $50,000. What amount of interest should Liddy expense for the year?

Multiple Choice

• $150,000.

• $50,000.

• $100,000.

• $20,000.

Pleasssssse answer all questions. thank you :-)

Answer 1

Bloomington Inc. exchanged land for equipment and $2,900 in cash. The book value and the fair value of the land were $104,900 and $89,200, respectively.Bloomington would record equipment and a gain/(loss) o
Assuming that the exchange has commercial substance, Bloomington would record equipment and a gain/(loss) of:
	Equipment	Gain/(loss)
a.	$    86,300.00	$      2,900.00
b.	$ 1,04,900.00	$    (2,900.00)
c.	$    86,300.00	$  (15,700.00)
d.	None of these answer choices are correct.
Multiple Choice
Option A
Option B
Option C	Correct
Option D
Equipment (FV of land – Cash)
Equipment ($89,200  – 2900)	$    86,300.00	Correct
Loss ($89,200 -$104,900 )	$  (15,700.00)
2) Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $181,000 with terms of 4/15, n/45. Payment was made within the discount period. Shipping costs were $4,400, which included $380 for insurance in transit. Installation costs totaled $12,500, which included $5,200 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10-ton draw press is: Multiple Choice $190,660. $195,660. $194,160. $188,660.
Purchase price ($181,000 x 96%)	$ 1,73,760.00
Shipping Costs	4400
Installation Costs	12500
Total cost of equipment	$ 1,90,660.00	Correct
3)  The balance sheets of Davidson Corporation reported net fixed assets of $344,000 at the end of 2018. The fixed-asset turnover ratio for 2018 was 4.0, and sales for the year totaled $1,492,000. Net fixed assets at the end of 2017 were:
Multiple Choice
$431,000.
$373,000.
$402,000.
None of these answer choices are correct.
Fixed Assets Turnover = Sales/ Average Fixed Assets
4 = $1492000/Average  Fixed Assets
Average  Fixed assets = 1492000/4	$ 3,73,000.00
Average  Fixed assets = (FA 2017  + FA 2018 )/2
$373000 = (FA 2017 + $344000)/2
FA 2017 = (373000 x 2) - $344,000	$ 4,02,000.00	Correct
4) Liddy Corp. began constructing a new warehouse for its operations during the current year. In the year Liddy incurred interest of $20,000 on a working capital loan, and interest on a construction loan for the warehouse of $80,000. Interest computed on the average accumulated expenditures for the warehouse construction was $50,000. What amount of interest should Liddy expense for the year?
Multiple Choice
$150,000.
$50,000.
$100,000.
$20,000.
Total interest cost incurred ($20,000 + 80,000)	$ 1,00,000.00	correct