week 6 textbook questions ch 11-12

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Concordia University Saint Paul *

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Accounting

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Jun 6, 2024

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Chapter 11 Exercise Set A: 1 LO 11.1 DONE The total balance of its Property, Plant, and Equipment is $160,000. Exercise Set A: 3 LO 11.3 DONE ($15,000- $3,000)/ 8 = $1,500 Exercise Set A: 7 LO 11.3 DONE Year 1: $180,000 Year 2: $144,000 Year 3: $115,200 Problem Set A: 1 LO 11.1 DONE Current assets Cash $50,000 Short-term marketable securities $25,000 Accounts receivable $13,000 Inventories $45,000 Other current assets $10,000 Total current assets $143,000 Fixed assets Land $100,000 Equipment $45,000 Accumulated depreciation- equipment $(-5,000) Goodwill $20,000 Other intangible assets $15,000 Total fixed assets $175,000 Total assets $318,000 Problem Set A: 3 LO 11.2 DONE

1. $128,000 should be recorded on the books for the land 2. Alanna Co. should record $716,000 on its books for the building Problem Set A: 8 LO 11.3 DONE Depreciation expense each year: Year 1- $90,000 Year 2- $72,000 Year 3- $57,600 Asset book value: Year 1- $360,000 Year 2- $288,000 Year 3- $230,400 Thought Provokers: 1 LO 11.1 DONE Goodwill is an intangible asset meaning that it is something that is not physically owned, the owner does not have the intention to sell, and it still has specific rights to the owner. Some examples of an intangible asset are patents, licenses, trademarks, and copyrights. It is not something that you can physically see or touch like a building or baseball card but something that still belongs to you. Goodwill is the value of acquiring/ purchasing a business for more than the physical value because of the other gained assets that will be future advantages and benefits. Examples of the future advantages and benefits are the customer relationships, quality of products, and the reputation of the business. Chapter 12 Exercise Set B: 2 LO 12.1 DONE A. Sales tax payable- Extra tax collected on the sale of a product B. Income Taxes Payable- State withholding from an employee’s paycheck C. Current portion of a long-term note payable- The portion of a note due within the operating period D. Interest Payable- A risk incentive rate for a loan E. Accounts Payable- A credit line between a purchaser and a supplier F. Unearned Revenue- A customer pays in advance for services Exercise Set B: 4 LO 12.2 DONE Date Account Debit Credit June 1 Cash $4,500

Deferred/ unearned revenue $4,500 Date Account Debit Credit July 31 Deferred/ unearned revenue $3,000 Service revenue $3,000 Exercise Set B: 8 LO 12.3 DONE sent to chegg 1. Sales revenue $20,750 Cost of goods sold $5,400 Gross profit $15,350 Salaries expense $4,250 Warranty expense $415 Lawsuit expense $4,200 Net income $6,485 2. Assets Cash $8,500 Accounts receivable $3,000 Merchandise inventory $6,750 Buildings $5,600 Equipment $4,000 Total assets $28,850 Liabilities Accounts payable $7,500 Salaries payable $4,250

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Total liabilities $11,750 Equity Common stock $5,000 Retained earnings $12,100 Total equity $17,100 Total liabilities and equity $28,850 3. Pens Unlimited is facing a lawsuit that may result in a financial loss of $4,200, which will be recognized as an expense in the income statement. This expense will be recorded for December 31, 2017. Pens Unlimited has estimated a warranty cost of 2% of the annual sales revenue, which will be viewed in the income statement. It will be recorded for December 31, 2017 as an estimated cost of $415. Problem Set B: 3 LO 12.2 DONE Date Account Debit Credit October 3 Fabric purchase $7,200 Accounts payable $7,200 Date Account Debit Credit October 8 Purchase account $2,775 Accounts payable $2,775 Date Account Debit Credit October 18 Accounts payable $2,775 Cash $2,636.25 Discount $138.75 Date Account Debit Credit

October 23 Accounts payable $7,200 Cash $7,200 Problem Set B: 5 LO 12.2 Problem Set B: 11 LO 12.5 Use the information from Exercise 12.10 to complete this problem. Record entries for each transaction listed. Nov. 1 Paid cash to a federal depository for FICA Social Security and FICA Medicare; paid accumulated salaries Nov. 3 Remitted cash payment for FUTA and SUTA to federal and state unemployment agencies Nov. 10 Issued a check to an IRS-approved bank for federal and state income taxes Nov. 12 Paid cash to health insurance carrier for total outstanding health insurance liability