1) A machine is purchased for $5,000 plus additional freight costs of $500. Main modification and installation costs will be $1,200. Determine the amount of the cost basis for this asset?
A.) $5,000
B.) $6,700
C.) $6,200
D.) $5,500
2) The adjusted trial balance for the Lifesaver Corporation at the end of the present year, 2007, contained the given accounts.
5-year Bonds Payable 8% $1,000,000
Bond Interest Payable 50,000
Premium on Bonds Payable 100,000
Notes Payable (3 mo.) 40,000
Notes Payable (5 yr.) 165,000
Mortgage Payable ($15,000 due presently) 200,000
Salaries Payable 18,000
Taxes Payable (due 3/15 of next yr) 25,000
The net long-term liabilities reported on the balance sheet are:
A) $1,365,000
B) $1,350,000
C) $1,465,000
D) $1,450,000
3) Which of the given is not true of a corporation?
A) It might buy, own and sell property.
B) It might sue and be sued.
C) The acts of its owners bind the corporation.
D) It might enter to binding legal contracts in its own name.