Property, plant, and equipment and intangible assets are:
Multiple Choice
Created by the normal operation of the business and include accounts receivable.
All assets except cash and cash equivalents.
Long-term revenue-producing assets.
Current and long-term assets used in the production of either goods or services.
A company purchased land for $84,000 cash. Commissions of $9,000, property taxes of $9,500, and title insurance of $2,600 were also incurred. The $9,500 in property taxes includes $5,800 in back taxes paid by the company on behalf of the seller and $3,700 due for the current year after the purchase date. For what amount should the company record the land?
Multiple Choice
$84,000
$105,100
$101,400
$98,800
A company acquired an office building on three acres of land for a lump-sum price of $2,750,000. The building was completely furnished. According to independent appraisals, the fair values were $1,600,000, $2,000,000, and $400,000 for the building, land, and furniture, respectively. The initial values of the building, land, and furniture would be:
| Building | Land | Furniture | |
| a. | $ 1,600,000 | $ 2,000,000 | $ 400,000 |
| b. | $ 1,100,000 | $ 1,375,000 | $ 275,000 |
| c. | $ 1,375,000 | $ 1,100,000 | $ 275,000 |
| d. | None of the other answer choices are correct. | ||
Multiple Choice
Option a.
Option b.
Option c.
Option d.
A company purchased a high-speed industrial centrifuge at a cost of $320,000. Shipping costs totaled $17,000. Foundation work to house the centrifuge cost $7,500. An additional water line had to be run to the equipment at a cost of $2,500. Labor and testing costs totaled $5,100. Materials used up in testing cost $2,500. The capitalized cost is:
Multiple Choice
$354,600.
$337,000.
$347,000.
$352,000.
During the current year, Brewer Company acquired all of the outstanding common stock of Miller Incorporated paying $12,400,000 cash. The book values and fair values of Miller’s assets and liabilities acquired are listed below:
| Book Value | Fair Value | |
| Accounts receivable | $ 2,000,000 | $ 1,825,000 |
| Inventories | 3,100,000 | 4,400,000 |
| Property, plant, and equipment | 9,400,000 | 12,025,000 |
| Accounts payable | 3,400,000 | 3,400,000 |
| Bonds payable | 4,900,000 | 4,525,000 |
Required:
Prepare the journal entry to record the acquisition by Brewer Company.
Note: If no entry is required for a transaction/event, select “No journal entry required” in the first account field.