Reference no: EM132518470

Problem 1: The company purchased a building, parking lot, and land. The company paid in cash a total amount of $ 100,000. The estimated fair value of building is $ 62,000, land is $ 45,000, and the car park is $ 18,000. The land must be registered in the company's record at:

a. $ 100,000

b.$ 36,000

c. $ 42,000

d. $ 45,000

Problem 2: Al Khor purchased land, building and equipment from Laguna for a cash payment of $ 315,000. The estimated fair values of the assets are: land 72,000 dollars; Buildings of 198,000 dollars; And the equipment is 90,000 dollars. At what cost should the equipment be recorded?

a. 63,000 dollars

b. 78,750 dollars

c. 90,000 dollars

d. 105,000 dollars

Problem 3: The difference between depreciation expense and accumulated depreciation is:

a. The first is an expense, while the second is a contra asset.

b. The first is presented in the income statement, while the second is presented in balance sheet.

c. The first one comprises the current year depreciation, while the second includes the depreciation of the current year and previous years.

d. All answers are correct.

Problem 4: When a company buy an intangible asset, what is the correct journal entry:

a. Credit Intangible asset, debit cash

b. Debit intangible asset, debit cash

c. Debit intangible asset, credit cash

d. Credit intangible asset, debit cash

Problem 5: Al-Duhail Company bought a machine for 39,000 riyals and is expected to have a useful life of 4 years and a residual value of 4,000 riyals at the end of that time. If the company uses the straight-line method to depreciate the machines, then the net book value (carrying amount) of the machine at the end of the second year is:

a. 17,500

b. 19,500

c. 21,500

d. 30,250