Adama Company incurred the following costs.Indicate to which account Adama would debit each of the costs.1. Sales tax on factory machinery purchased$ 5,000 Select the account to be debitedEquipmentPrepaid InsuranceBuildingLandLand Improvements2. Painting of and lettering on truck immediately upon purchase700 Select the account to be debitedLandPrepaid InsuranceEquipmentBuildingLand Improvements3. Installation and testing of factory machinery2,000 Select the account to be debitedPrepaid InsuranceBuildingLandEquipmentLand Improvements4. Real estate broker’s commission on land purchased3,500 Select the account to be debitedLandLand ImprovementsPrepaid InsuranceBuildingEquipment5. Insurance premium paid for first year’s insurance on new truck880 Select the account to be debitedLandEquipmentPrepaid InsuranceLand ImprovementsBuilding6. Cost of landscaping on property purchased7,200 Select the account to be debitedEquipmentLand ImprovementsLandBuildingPrepaid Insurance7. Cost of paving parking lot for new building constructed17,900 Select the account to be debitedLand ImprovementsLandBuildingPrepaid InsuranceEquipment8. Cost of clearing, draining, and filling land13,300 Select the account to be debitedPrepaid InsuranceLandLand ImprovementsBuildingEquipment9. Architect’s fees on self-constructed building10,000

Sagot :

Answer:

1. Sales tax on factory machinery purchased  - $5,000

Account to be debited: Equipment

2. Painting of and lettering on truck immediately upon purchase - $700

Account to be debited: Equipment

3. Installation and testing of factory machinery - $2,000

Account to be debited: Equipment

4. Real estate broker’s commission on land purchased - $3,500

Account to be debited: Land

5. Insurance premium paid for first year’s insurance on new truck - $880

Account to be debited: Prepaid Insurance

6. Cost of landscaping on property purchased - $7,200

Account to be debited: Land Improvements

7. Cost of paving parking lot for new building constructed - $17,900

Account to be debited: Land Improvements

8.  Cost of clearing, draining, and filling land - $13,300

Account to be debited: Land

9. Architect’s fees on self-constructed building - $10,000

Account to be debited: Buildings