Question 1 Not yet answered Marked out of 1 Acer, Inc. plans to develop a hoppan

Question

Question 1 Not yet answered Marked out of 1 Acer, Inc. plans to develop a hoppang center. In the first quarter, the following amounts were apent: Acquisition of land$17,000 Surveys and legal fees600 Land clearing800 reneing5, 000 Install lighting and signagel, 560 Removeflag : What amoune should be recorded as the cost of the land in the corporation's books? Select one A $23,400 B $18.400 C. $19.960 D $22,800 E. None of the above Question 2 Not yet anpwered Marked out of 1 P Flag question An asset was purchased for $31.000 on January 1. 2016. The assets estimated useful itfe was five years, and its residual value was $8.000. The straight-line method of depreciation was used Calculate the gain or loss if the asset is Maned ut et 1sold for $21000 on December 31,2016, the last day of the accounting period Select one: A $2.700 gain B. $5.400 loss C $5.400 gain D,no gain or no loss E None of the above

Explanation / Answer

1)cost of land = purchase cost+legal cost+land clearing

   = 17000+600+800

    = 18400

correct option is "B"

2)Depreciation : [cost-salvsge ]/useful life

       =[31000- 8000]/5

       = 4600

Book value as on 31 dec 2016 = cost-depreciation

         = 31000-4600

        = 26400

loss on sale =sale value -book value

             = 21000-26400

                 = - 5400 loss

correct option is B"

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