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For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Recorded $600 of depreciation expense. b. Sold land that had originally cost $27,000 for $42,000 in cash. c. Acquired a new machine under a financing lease. The present value of future lease payments, discounted at 10%, was $36,000. d. Recorded the first annual payment of $6,000 for the leased machine (in part c). e. Recorded a $18,000 payment for the cost of developing and registering a trademark. f. Recognized periodic amortization for the trademark (in part e) using a 40-year useful life. g. Sold used production equipment for $42,000 in cash. The equipment originally cost $120,000, and the accumulated depreciation account has an unadjusted balance of $66,000. It was determined that a $3,000 year-to-date depreciation entry must be recorded before the sale transaction can be recorded. Record the adjustment and the sale. Transaction a. b. C. Assets Accumulated depreciation -600 Land -27,000 Cash +42,000 Right-of-use asset +36,000 Liabilities Lease liability +36,000 Net Income Depreciation expenses -600 Gain on sale of land +15,000

For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Recorded $600 of depreciation expense. b. Sold land that had originally cost $27,000 for $42,000 in cash. c. Acquired a new machine under a financing lease. The present value of future lease payments, discounted at 10%, was $36,000. d. Recorded the first annual payment of $6,000 for the leased machine (in part c). e. Recorded a $18,000 payment for the cost of developing and registering a trademark. f. Recognized periodic amortization for the trademark (in part e) using a 40-year useful life. g. Sold used production equipment for $42,000 in cash. The equipment originally cost $120,000, and the accumulated depreciation account has an unadjusted balance of $66,000. It was determined that a $3,000 year-to-date depreciation entry must be recorded before the sale transaction can be recorded. Record the adjustment and the sale. Transaction a. b. C. Assets Accumulated depreciation -600 Land -27,000 Cash +42,000 Right-of-use asset +36,000 Liabilities Lease liability +36,000 Net Income Depreciation expenses -600 Gain on sale of land +15,000

FINANCIAL ACCOUNTING
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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es For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Recorded $600 of depreciation expense. b. Sold land that had originally cost $27,000 for $42,000 in cash. c. Acquired a new machine under a financing lease. The present value of future lease payments, discounted at 10%, was $36,000. d. Recorded the first annual payment of $6,000 for the leased machine (in part c). e. Recorded a $18,000 payment for the cost of developing and registering a trademark. f. Recognized periodic amortization for the trademark (in part e) using a 40-year useful life. g. Sold used production equipment for $42,000 in cash. The equipment originally cost $120,000, and the accumulated depreciation account has an unadjusted balance of $66,000. It was determined that a $3,000 year-to-date depreciation entry must be recorded before the sale transaction can be recorded. Record the adjustment and the sale. Transaction a. b. C. Assets Accumulated depreciation -600 Land -27,000 Cash +42,000 Right-of-use asset +36,000 Liabilities Lease liability +36,000 Net Income Depreciation expenses-600 Gain on sale of land +15,000
Transcribed Image Text:es For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Recorded $600 of depreciation expense. b. Sold land that had originally cost $27,000 for $42,000 in cash. c. Acquired a new machine under a financing lease. The present value of future lease payments, discounted at 10%, was $36,000. d. Recorded the first annual payment of $6,000 for the leased machine (in part c). e. Recorded a $18,000 payment for the cost of developing and registering a trademark. f. Recognized periodic amortization for the trademark (in part e) using a 40-year useful life. g. Sold used production equipment for $42,000 in cash. The equipment originally cost $120,000, and the accumulated depreciation account has an unadjusted balance of $66,000. It was determined that a $3,000 year-to-date depreciation entry must be recorded before the sale transaction can be recorded. Record the adjustment and the sale. Transaction a. b. C. Assets Accumulated depreciation -600 Land -27,000 Cash +42,000 Right-of-use asset +36,000 Liabilities Lease liability +36,000 Net Income Depreciation expenses-600 Gain on sale of land +15,000
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