Bundle: Financial & Managerial Accounting, 13th + Working Papers, Volume 1, Chapters 1-15 For Warren/reeve/duchac’s Corporate Financial Accounting, ... 13th + Cengagenow™v2, 2 Terms Access Code
13th Edition
ISBN: 9781337062268
Author: Carl S. Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 1, Problem 1.1BPE
To determine
Cost concept: This is an accounting concept which states that the actual cost paid in receipt of the asset is the reliable measure and hence assets and services should be recorded at actual cost or historical cost.
To describe: The recording of purchase of land in the books of HR Service
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Cost principleOn June 25, Ritts Roofing extended an offer of $250,000 for land that hadbeen priced for sale at $300,000. On July 9, Ritts accepted the seller'scounteroffer of $275,000. On October 1, the land was assessed at a valueof $280,000 for property tax purposes. On December 22, Ritts wasoffered $305,000 for the land by a national retail chain. At what valueshould the land be recorded in Ritts Roofing's records?
In a cost center, the manager has responsibility and authority for making decisions that affect
a. costs
b. investments in assets
c. both costs and revenues
d. revenues
Keating Co. is considering disposing of equipment with a cost of $68,000 and accumulated depreciation of $47,600. Keating Co. can sell the equipment through a broker for $27,000 less 8% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $46,000. Keating will incur repair, insurance, and property tax expenses estimated at $10,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is
a. $11,160
b. $7,812
c. $16,740
d. $13,392
If sales are $828,000, variable costs are 68% of sales, and operating income is $278,000, what is the contribution margin ratio?
a. 64%
b. 36%
c. 68%
d. 32%
Chico Company paid $600,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the following estimates of the market values of the assets if they had
been purchased separately: Office furniture, $160,000; Building, $500,000; and Land, $130,000. Based on this information, what is the cost that should be allocated to the office furniture?
Note: Round intermediate percentage values to a whole percentage.
Multiple Choice
$235,562
$66,500
$160,000
$120,000
Chapter 1 Solutions
Bundle: Financial & Managerial Accounting, 13th + Working Papers, Volume 1, Chapters 1-15 For Warren/reeve/duchac’s Corporate Financial Accounting, ... 13th + Cengagenow™v2, 2 Terms Access Code
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