Quiz Chpts 10 & 11

Use the following information for questions 78 and 80.

On March 1, 2010, Newton Company purchased land for an office site by paying $540,000 cash. Newton began construction on the office building on March 1. The following expenditures were incurred for construction:
Date Expenditures
March 1, 2010 $ 360,000
April 1, 2010 504,000
May 1, 2010 900,000
June 1, 2010 1,440,000
The office was completed and ready for occupancy on July 1. To help pay for construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2010 was a $300,000, 12%, 6-year note payable dated January 1, 2010.

78. The weighted-average accumulated expenditures on the construction project during 2010 were
a. $384,000.
b. $2,934,000.
c. $312,000.
d. $696,000.

80. Assume the weighted-average accumulated expenditures for the construction project are $870,000. The amount of interest cost to be capitalized during 2010 is
a. $78,300.
b. $82,800.
c. $90,000.
d. $100,800.

91. Dodson Company traded in a manual pressing machine for an automated pressing machine and gave $8,000 cash. The old machine cost $93,000 and had a net book value of $71,000. The old machine had a fair market value of $60,000. Which of the following is the correct journal entry to record the exchange?
a. Equipment 68,000 Loss on Exchange 11,000 Accumulated Depreciation 22,000 Equipment 93,000 Cash 8,000
b. Equipment 68,000 Equipment 60,000 Cash 8,000
c. Cash 8,000 Equipment 60,000 Loss on Exchange 11,000 Accumulated Depreciation 22,000 Equipment 101,000
d. Equipment 123,000 Accumulated Depreciation 22,000 Equipment 93,000 Cash 8,000

117. Durler Company traded machinery with a book value of $180,000 and a fair value of $300,000. It received in exchange from Hoyle