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Accounting 5 Pages

Fundamentals Of Accounting ­ Midterm Problems

Question

1. On April 25, Gregg Repair Service extended an offer of $115,000 for land that had been priced for sale at $140,000. On May 3, Gregg Repair Service accepted the seller’s counteroffer of $127,000. On June 20, the land was assessed at a value of $88,000 for property tax purposes. On August 4, Gregg Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in Gregg Repair Service’s records?

2. Donner Company is selling a piece of land adjacent to their business. An appraisal reported the market value of the land to be $120,000. The Focus Company initially offered to buy the land for $107,000. The companies settled on a purchase price of $115,000. On the same day, another piece of land on the same block sold for $122,000. Under the cost concept, what is the amount that will be used to record this transaction in the accounting records?

3. The assets and liabilities of the company are $175,000 and $40,000, respectively. Owner’s equity should equal

4. If total liabilities decreased by $55,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is

5. If total assets decreased by $88,000 during a period of time and owner's equity increased by $65,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is 

6. Land, originally purchased for $20,000, is sold for $75,000 in cash. What is the effect of the sale on the accounting equation?

Solution

Title: Fundamentals Of Accounting ­ Midterm Problems
Length: 5 pages (1000 Words)
Style: APA

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Fundamentals of Accounting ­ Midterm Exams (Problems)

Answer Section

1. ANS: D PTS: 1 DIF: Moderate NAT: AACSB Analytic | AICPA BB­Industry | ACBSP­APC­02­GAAP OBJ: 01­02

2. ANS: B PTS: 1 DIF: Moderate OBJ: 01­02

3. ANS: B PTS: 1 DIF: Easy OBJ: NAT: AACSB Analytic | AICPA FN­Measurement | ACBSP­APC­06­Recording Transactions 01­03

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