406Part Three Accounting SEXERCISE 11-11ENTRIES FOR SALE OFPLANT ASSETA piece of equipment acquired on January 3, 1991, at a cost of $57,500, has an estiuseful life of 5 years, an estimated residual value of $7,500, and is depreciatedstraight-line method.Objective 7a. What was the book value of the equipment at December 31, 1994, the end of the fciyear?b. Assuming that the equipment was sold on July 1, 1995, for $9,000, journalize the emácto record (1) depreciation for the six months of the 'curfent year ending December1995, and (2) the sale of the equipment.WEXERCISE 11-12DISPOSAL OF PLANT ASSETObjective 7A piece of equipment acquired on January 3, 1991, at a cost of $25,000, has an estimuseful life of 4 years and an estimated residual value of $5,000.a. What was the annual amount of depreciation for the years 1991, 1992, and 1993, usathe straight-line method of depreciation?b. What was the book value of the equipment on January 1, 1994?c. Assuming that the equipment was sold on January 2, 1994, for $8,500, joumalizaentry to record the sale.d. Assuming that the equipment had been sold for $11,500 on January 2, 1994, instea n$8,500, journalize the entry to record the sale.EXERCISE 11-13ENTRIES FOR LOSS ONTRADE OF PLANT ASSETObjective 7On July 1, Lewis Co. acquired a new computer with a list price of $125,000. Lewis receiveltrade-in allowance of $15,000 on an old computer of a similar type, paid cash of $30,00gave a series of five notes payable for the remainder. The following information about the ikcomputer is obtained from the account in the office equipment ledger: cost, $82,500; amlated depreciation on December 31, the end of the preceding fiscal year, $50,000; annual dpreciation, $15,000. Journalize the entries to record: (a) the current depreciation of the olcomputer to the date of trade-in, (b) the transaction on July 1 for financial reporting purpoesEXERCISE 11-14On July 1, Klaus Co. acquired a new computer with a list price of $130,000. Klaus recereitrade-in allowance of $20,000 on an old computer of a similar type, paid cash of $20,00gave a series of five notes payable for the remainder. The following information abouk the acomputer is obtained from the account in the office equipment ledger: cóst, $82,500; acumlated depreciation on December 31, the end of the preceding fiscal year, $62,500; ánnuapreciation, $15,000. Journalize the entries to record: (a) the current depreciation of thecomputer to the date of trade-in, (b) the transaction on July 1 for financial reporting purpoENTRIES FOR GAIN ONTRADE OF PLANT ASSETObjective 7EXERCISE 11-15acclDEPRECIATION ON ASSETACQUIRED BY EXCHANGEObjective 7On the first day of the fiscal year, a delivery truck with a list price of $30,000 was acoiin exchange for an old delivery truck and $26,000 cash. The old truck had a book väl$2,500 at the date of the exchange. The new truck is to be depreciated over 5 years bstraight-line method. The estimated residual value is $2,000.a. Determine the following:1. Annual depreciation for financial reporting purposes.2. Annual depreciation for income tax purposes:b. Assuming that the book value of the old delivery truck was $5,000, determine thelowing:1. Annual depreciation for financial reporting purposes.2. Annual depreciation for income tax purposes.Programs Co. is a computer software company marketing software products in the lStates and Canada. While Programs Co. has over 30 sales offices, all accounting is handat the company's headquarters in Dayton, Ohio.Programs Co. keeps all its plant asset records on a computerized system. The compmaintains a subsidiary ledger of all plant assets owned by the company and calculalespreciation automatically. Whenever a manager at one of the thirty sales offices wandpurchase a plant asset, a purchase request is submitted to headquarters for approval. Uponapproval, the plant asset is purchased and the invoice is sent back to headquarters so tEXERCISE 11-16INTERNAL CONTROL OFPLANT ASSETSObjective 9

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EXERCISE 11-11 ENTRIES FOR SALE OF PLANT ASSET A piece of equipment acquired on January 3, 1991, at a cost of $57,500, has an esti useful life of 5 years, an estimated residual value of $7,500, and is depreciated straight-line method. Objective 7 a. What was the book value of the equipment at December 31, 1994, the end of the ic year? b. Assuming that the equipment was sold on July 1, 1995, for $9,000, journalize the anti to record (1) depreciation for the six months of the 'curfent year ending December 1995, and (2) the sale of the equipment.

EXERCISE 11-11 ENTRIES FOR SALE OF PLANT ASSET A piece of equipment acquired on January 3, 1991, at a cost of $57,500, has an esti useful life of 5 years, an estimated residual value of $7,500, and is depreciated straight-line method. Objective 7 a. What was the book value of the equipment at December 31, 1994, the end of the ic year? b. Assuming that the equipment was sold on July 1, 1995, for $9,000, journalize the anti to record (1) depreciation for the six months of the 'curfent year ending December 1995, and (2) the sale of the equipment.

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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