Question

3. Capitalize vs. Expense exercises. a. Paid plumbers for repair of leaky faucets b. Installed a new air-conditioning system for the building c. Paid interest on a building mortgage. Paid principal. d. Replaced smashed front door e. Paid janitorial wages f. Paid sales tax on the purchase of a computer g. Paid for a maintenance contract for the computers h. Paid a consultant to advise on a marketing strategy i. Paid for overhaul of machinery that extends the EUL j. Acquired a patent from GE k. Installed new lighting fixtures in a leased building

4. Basket Purchase. XYZ acquired a building and land for $720,000 from a local gas station that had failed. The tax assessor had placed an assessed valuation of $200,000 on the land and $400,000 on the building as of January 1 of the current year. Record the entry for the purchase of the property.

Answer 1