Shaffer Company acquires land for $77,000 cash. Additional costs are as follows. Removal of shed $ 300 Filling and grading 1,500 Salvage value of lumber of shed 120 Broker commission 1,130 Paving of parking lot 10,000 Closing costs 560 Shaffer will record the acquisition cost of the land as a. $77,000. b. $78,690. c. $80,610. d. $80,370. 2. Carpino Company purchased equipment and these costs were incurred: Cash price $75,000 Sales taxes 3,500 Insurance during transit 750 Installation and testing 1.500 Total costs $80.750 What amount should be recorded as the cost of the equipment? a. $75,000 b. $78,500 c. $79,250 d. $80,750 3. Depreciation is the process of allocating the cost of a plant asset over its useful life in a(n) a. equal and equitable manner. b. accelerated and accurate manner. c. systematic and rational manner. d. conservative market-based manner. 4. The book value of an asset is equal to the a. asset's fair value less its historical cost. b. blue book value relied on by secondary markets. c. replacement cost of the asset. d. asset's cost less accumulated depreciation.
