Ivanhoe Engineering Corporation purchased conveyor equipment with a list price of $45,200. Three independent cases that are related to the equipment follow. Assume that the equipment purchases are recorded gross. Geddes paid cash for the equipment 25 days after the purehase, along with 5% GST (recoverable) and provincial sales tax of $3,164, both based on the purchase price. The vendor's credit terms were 1/10, n/30. 1. Geddes traded in equipment with a book value of $1,000 (initial cost $41,300) and paid $42,100 in cash one month after the purchase. The old equipment could have been sold for $1.600 at the date of trade but was accepted for a trade-in allowance of $3,100 on the new equipment. 2. Geddes gave the vendor a $10,100 cash down payment and a 11% note payable with blended principal and interest payments of $17,550 each, due at the end of each of the next two years. 3. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF1. (a) Prepare the general journal entries to record the acquisition and the subsequent payment, including any notes payable, in each of the three independent cases above. For item 3, use a table, financial calculator, or Excel. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor values to 5 decimal places, eg. 1.25124 and final answers to 0 decimal places, eg. 5,275.) Account Titles and Explanation Debit Credit 1. (To record purchase of equipment on credit.) (To record payment to the vendor.) 2. (To record exchange of equipment.) (To record payment to the vendor.) 3.
Ivanhoe Engineering Corporation purchased conveyor equipment with a list price of $45,200. Three independent cases that are related to the equipment follow. Assume that the equipment purchases are recorded gross. Geddes paid cash for the equipment 25 days after the purehase, along with 5% GST (recoverable) and provincial sales tax of $3,164, both based on the purchase price. The vendor's credit terms were 1/10, n/30. 1. Geddes traded in equipment with a book value of $1,000 (initial cost $41,300) and paid $42,100 in cash one month after the purchase. The old equipment could have been sold for $1.600 at the date of trade but was accepted for a trade-in allowance of $3,100 on the new equipment. 2. Geddes gave the vendor a $10,100 cash down payment and a 11% note payable with blended principal and interest payments of $17,550 each, due at the end of each of the next two years. 3. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF1. (a) Prepare the general journal entries to record the acquisition and the subsequent payment, including any notes payable, in each of the three independent cases above. For item 3, use a table, financial calculator, or Excel. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor values to 5 decimal places, eg. 1.25124 and final answers to 0 decimal places, eg. 5,275.) Account Titles and Explanation Debit Credit 1. (To record purchase of equipment on credit.) (To record payment to the vendor.) 2. (To record exchange of equipment.) (To record payment to the vendor.) 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ivanhoe Engineering Corporation purchased conveyor equipment with a list price of $45,200. Three independent cases that are
related to the equipment follow. Assume that the equipment purchases are recorded gross.
Geddes paid cash for the equipment 25 days after the purahase, along with 5% GST (recoverable) and provincial sales tax of
$3,164, both based on the purchase price. The vendor's credit terms were 1/10, n/30.
1.
Geddes traded in equipment with a book value of $1,000 (initial cost $41,300) and paid $42,100 in cash one month after the
purchase. The old equipment could have been sold for $1.600 at the date of trade but was accepted for a trade-in allowance
of $3.100 on the new equipment.
2.
Geddes gave the vendor a $10,100 cash down payment and a 11% note payable with blended principal and interest payments
of $17,550 each, due at the end of each of the next two years.
3.
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.
(a)
Prepare the general journal entries to record the acquisition and fthe subsequent payment, including any notes payable, in each of the
three independent cases above, For item 3, use a table, financial calculator, or Excel. (Credit account titles are automatically indented
when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.
Round factor values to 5 decimal places, eg 1.25124 and final answers to 0 decimal places, eg. 5,275.)
Account Titles and Explanation
Debit
Credit
1.
(To record purchase of equipment on credit.)
(To record payment to the vendor.)
2.
(To record exchange of equipment.)
(To record payment to the vendor.)
3.
(To record purchase of equipment on credit.)
First Payment on Note
(To record payment to the vendor.)
Second Payment on Note
(To record payment to the vendor.)
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