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 $200 of depreciation expense. b. Sold land that had originally cost $14,300 for $10,000 in cash. c. Recorded a $60,700 payment for the cost of developing and registering a patent. d. Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life. e. Capitalized $3,000 of cash expenditures made to extend the useful life of production equipment. f. Expensed $1,400 of cash expenditures incurred for routine maintenance of production equipment. g. Sold a used machine for $8,900 in cash. The machine originally cost $31,200 and had been depreciated for the first two years of its five-year useful life using the double-declining-balance method. (Hint. You must compute the balance of the accumulated depreciation account before you can record the sale.) h. Purchased a business for $324,000 in cash. The fair values of the net assets acquired were as follows: Land, $39,400; Buildings, $195,000; Equipment, $97,000; and Long-Term Debt, $68,300. Transaction a. b. C. d. e. f. 9- h. Assets Accumulated depreciation -200 Liabilities Net Income Depreciation expenses -200
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 $200 of depreciation expense. b. Sold land that had originally cost $14,300 for $10,000 in cash. c. Recorded a $60,700 payment for the cost of developing and registering a patent. d. Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life. e. Capitalized $3,000 of cash expenditures made to extend the useful life of production equipment. f. Expensed $1,400 of cash expenditures incurred for routine maintenance of production equipment. g. Sold a used machine for $8,900 in cash. The machine originally cost $31,200 and had been depreciated for the first two years of its five-year useful life using the double-declining-balance method. (Hint. You must compute the balance of the accumulated depreciation account before you can record the sale.) h. Purchased a business for $324,000 in cash. The fair values of the net assets acquired were as follows: Land, $39,400; Buildings, $195,000; Equipment, $97,000; and Long-Term Debt, $68,300. Transaction a. b. C. d. e. f. 9- h. Assets Accumulated depreciation -200 Liabilities Net Income Depreciation expenses -200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please answer within 30 minutes..
Transcribed Image Text: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 $200 of depreciation expense.
b. Sold land that had originally cost $14,300 for $10,000 in cash.
c. Recorded a $60,700 payment for the cost of developing and registering a patent.
d. Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life.
e. Capitalized $3,000 of cash expenditures made to extend the useful life of production equipment.
f. Expensed $1,400 of cash expenditures incurred for routine maintenance of production equipment.
g. Sold a used machine for $8,900 in cash. The machine originally cost $31,200 and had been depreciated for the first two years of its
five-year useful life using the double-declining-balance method. (Hint. You must compute the balance of the accumulated
depreciation account before you can record the sale.)
h. Purchased a business for $324,000 in cash. The fair values of the net assets acquired were as follows: Land, $39,400; Buildings,
$195,000; Equipment, $97,000; and Long-Term Debt, $68,300.
Transaction
a.
b.
C.
d.
e.
f.
9.
h.
Assets
Accumulated depreciation -200
Liabilities
Net Income
Depreciation expenses -200
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education