Reference no: EM132251786

Questions -

Q1. The following expenditures were incurred by McCoy Company in purchasing land: cash price $79,000, accrued taxes $2,800, attorneys' fees $3,900, real estate broker's commission $1,100, and clearing and grading $4,000. What is the cost of the land?

Q2. Rich Castillo Company incurs the following expenditures in purchasing a truck: cash price $53,000, accident insurance $3,800, sales taxes $3,400, motor vehicle license $100, and painting and lettering $400. What is the cost of the truck?

Q3. Corales Company acquires a delivery truck at a cost of $48,000. The truck is expected to have a salvage value of $11,000 at the end of its 10-year useful life.

Compute annual depreciation expense for the first and second years using the straight-line method.

Q4. On January 1, 2017, Emporia Country Club purchased a new riding mower for $27,000. The mower is expected to have an 8-year life with a $3,000 salvage value.

What journal entry would Emporia make at December 31, 2017, if it uses straight-line depreciation? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If theres no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Q5. Rosco Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 157,000 miles. Taxi no. 10 cost $37,000 and is expected to have a salvage value of $730. Taxi no. 10 is driven 31,800 miles in year 1 and 19,100 miles in year 2.

(a1) Calculate depreciation cost per mile using unit-of-activity method.