CP9-3 Analyzing and Recording Long-Lived Asset Transactions with Partial-Year DepreciationPalmer Cook Music Productions manages and operates two bands. The company entered into thefollowing transactions during a recent year.January 2January 8January 30Purchased a tour bus for $80,000 by paying $20,000 cash and signing a $60,000note due in two years.March 31The bus was painted with the logos of the two bands at a cost of $350, on account.Wrote a check for the amount owed on account for the work completed onJanuary 8.February 1February 8 Paid $250 cash for minor repairs to the tour bus.March 1Purchased new speakers and amplifiers and wrote a check for the full$12,000 cost.Paid $20,000 cash and signed a $190,000 five-year note to purchase a smalloffice building and land. An appraisal indicated that the building and landcontributed equally to the total price.Paid $90,000 cash to acquire the goodwill and certain tangible assets of Kris'Myth, Inc. The fair values of the tangible assets acquired were $20,000 for bandequipment and $60,000 for recording equipment.Required:2.1. Analyze the accounting equation effects and record journal entries for each of the transactions.TIP: Goodwill is recorded as the excess of the purchase price over the fair value of individual assets.For the tangible and intangible assets acquired in the preceding transactions, determine theamount of depreciation and amortization that Palmer Cook Music Productions should reportfor the quarter ended March 31. For convenience, the equipment and vehicle are depreciatedthe same way, using the straight-line method with a useful life of five years and no residualvalue. The building is depreciated using the double-declining-balance method, with a 10-yearuseful life and residual value of $20,000.TIP: Calculate depreciation from the acquisition date to the end of the quarter.3. Prepare a journal entry to record the depreciation calculated in requirement 2.

Name: CP9-3 Analyzing and Recording Long-Lived Asset Transactions with Part
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Description: CP9-3 Analyzing and Recording Long-Lived Asset Transactions with Partial-Year DepreciationPalmer Cook Music Productions manages and operates two bands. The company entered into thefollowing transactions during a recent year.January 2January 8January

Any amount which has been paid by the company over and above the purchase cost of assets is simply…

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1. 2. Analyze the accounting equation effects and record journal entries for each of the transactions. TIP: Goodwill is recorded as the excess of the purchase price over the fair value of individual assets. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Palmer Cook Music Productions should report for the quarter ended March 31. For convenience, the equipment and vehicle are depreciated the same way, using the straight-line method with a useful life of five years and no residual value. The building is depreciated using the double-declining-balance method, with a 10-year useful life and residual value of $20,000. TIP: Calculate depreciation from the acquisition date to the end of the quarter. 3. Prepare a journal entry to record the depreciation calculated in requirement 2.

1. 2. Analyze the accounting equation effects and record journal entries for each of the transactions. TIP: Goodwill is recorded as the excess of the purchase price over the fair value of individual assets. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Palmer Cook Music Productions should report for the quarter ended March 31. For convenience, the equipment and vehicle are depreciated the same way, using the straight-line method with a useful life of five years and no residual value. The building is depreciated using the double-declining-balance method, with a 10-year useful life and residual value of $20,000. TIP: Calculate depreciation from the acquisition date to the end of the quarter. 3. Prepare a journal entry to record the depreciation calculated in requirement 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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