8Fixed and Intangible AssetsAPPLY WHAT YOU HAVE LEARNED8-1.Acquisition of assets.he following asset, identify the costs of the asset. For any costs incurred that are noincluded in the asset cost, specify how they would be recorded.rowth Company purchased a new machine for its manufacturing facility. CostsIncurred in conjunction with this purchase included the following:$90,000, subject to 2/10, n/30 discount5,4006,0001,900Invoice priceSales taxFreight to ship to GrowthTransport to factoryRepair of chip in machine fromdamage in loadingTraining of operatorsLunch for truck driver in transit5003,60025Make the journal entry to record the incurrence of these costs. Be sure to showcalculations for combined amounts. You may credit Cash for the total.

Compute cost of new machine for its manufacturing facility as shown below: The cost of new…

Answered: 8 Fixed and Intangible Assets APPLY…

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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Danube, Toggle, and ConnectOn rely on various intangible assets to operate their businesses. These companies amortize the cost of these assets using the straight-line method over the following average estimated useful lives (in years), as reported in their annual reports. Type of Intangible Asset Developed Technology Danube 5.4 Trade Names 5.9 Toggle 5.6 10.1 ConnectOn 3.5 11.5 Customer Relationships 5.1 5.5 7.5 Required: 1. Based on these estimates, identify the company that uses the longest periods for amortizing most of its classes of intangible assets. Toggle Danube ConnectOn 2. Will these estimates increase or decrease that company's net income relative to its competitors? Increase Decrease
TB MC Qu. 7-116 (Algo) A building was purchased for... A building was purchased for $66,500. The asset has an expected service life of eight years and depreciation expense each year is $6,000 using the straight-line method. What is the residual value of the building? Multiple Choice O $18,500 $8,312 $0 $13,312
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int Item Exercise 8-21 (Algorithmic) (LO. 2) Lopez acquired and placed in service a building on June 1, 2018, for $8,470,300. Compute the depreciation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2023 if the building is classified as residential rental real estate. 307,980 b. Calculate Lopez's cost recovery deduction for 2023 if the building is classified as nonresidential real estate. 217,178
Depreciation Choices and Outcome. Mulligan Co. purchased a new machine on January 1. The following information pertains to the purchase: Life of asset Salvage value Purchase price Sales tax Freight cost Electrical set-up Custom programming Estimated annual labor savings Additional revenue generated a. Determine the capitalized cost of the new machine $84600 b. Compute annual depreciation, accumulated depreciation and the machine's book value for the first three year assuming: i. Straight-line depreciation ii. Double-declining-balance method Year 1 Year 2 Year 3 Straight-Line Depreciation Double-Declining Balance Depreciation Accumulated Book Value at Depreciation Accumulated Book Value at Expense Depreciation Year-end Expense Depreciation Year-End $ 5 years $9,000 54,000 3,000 2,400 2,100 1,500 10,500 24,000 0 $ 0 0 Straight-line $ Double-declining $ 0 0 0 0 0 $ 0 $ 0 0 i. Straight-line depreciation ii. Double-declining balance method Do not use negative signs with your answers below.…
Determining Carrying Value and Amortization of Intangible Assets Review the following information pertaining to Denzel Company. 1. A patent was purchased on January 2 of Year 1 for $104,000 when the remaining legal life was 16 years. On January 2 of Year 3, Denzel determined that the remaining useful life of the patent was only eight years from the date of its acquisition. 2. On January 1 of Year 3, Denzel Company purchased a second patent for $128,000 cash. At January 1 of Year 3, a total of 6 years of the patent's legal life of 20 years had expired. 3. On June 30 of Year 3, Denzel Company paid a firm $12,800 for a new trademark. Denzel considers the life of the trademark to be indefinite. 4. On November 1 of Year 3, Denzel Company acquired all noncash assets and assumed all liabilities of Lee Company at a cash purchase price of $192,000. Denzel determined that the fair value of the identifiable net assets acquired in the transaction is $187,200. Required a. What is the carrying value…
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Pete's Propellers Company showed the following information in its Property, Plant, and Equipment Subledger regarding Machine #5027. Machine #5027 Component Single metal housing Motor Blade Date of purchase Jan. 12/21 Jan. 12/21 Jan. 12/21 Depreciation Method* SL DDB SL Cost $ 46,000 32,000 11,400 $ 89,400 Est. Residual Est. Life $ 7,000 15 yrs 10 yrs 5 yrs 2,000 1,200 *SL = Straight-line; DDB = Double-declining-balance On January 7, 2023, the machine blade cracked and it was replaced with a new one costing $11,600 purchased for cash (the old blade was scrapped). The new blade had an estimated residual value of $1,500 and an estimated life of five years and would continue to be depreciated using the straight-line method. During 2023, it was determined that the useful life on the metal housing should be increased to a total of 18 years instead of 15 years and that the residual value should be increased to $9,200. Required: 1. Prepare the entry to record the purchase of the replacement…

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