5. A current liability is a debt the company reasonably expects to pay from existing current assets within A) one year.. B) the operating cycle. C) one year or the operating cycle, whichever is longer. D) one year or the operating cycle, whichever is shorter 6. A company purchased land for $90,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the cost principle, the cost of land. would be recorded at A) $97,000. B) $90,000. C) $95,000. D) $102,000. 7. Shawnee Hospital installs a new parking lot. The paving cost $30,000 and the lights to illuminate the new parking area cost $15,000. Which of the following statements is true with respect to these additions? A) $30,000 should be debited to the Land account. B) $15,000 should be debited to Land Improvements. C) $45,000 should be debited to the Land account. D) $45,000 should be debited to Land Improvements. 8. The book value of an asset is equal to the A) asset's market value less its historical cost. B) blue book value relied on by secondary markets. C) replacement cost of the asset. D) asset's cost less accumulated depreciation. 9. A company purchased factory equipment on April 1, 2008 for $64,000. It is estimated that the equipment will have an $8,000 salvage value at the end of its 10-year useful life Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2008 is A) $6,400. B) $5,600. C) $4,200. D) $4,800. Page 2