PA5. LO 11.2 Jada Company had the following transactions during the year: • Purchased a machine for $500,000 using a long-term note to finance it • Paid $500 for ordinary repair • Purchased a patent for $45,000 cash • Paid $200,000 cash for addition to an existing building • Paid $60,000 for monthly salaries • Paid $250 for routine maintenance on equipment • Paid $10,000 for major repairs • Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and

PA5. LO 11.2 Jada Company had the following transactions during the year: • Purchased a machine for $500,000 using a long-term note to finance it • Paid $500 for ordinary repair • Purchased a patent for $45,000 cash • Paid $200,000 cash for addition to an existing building • Paid $60,000 for monthly salaries • Paid $250 for routine maintenance on equipment • Paid $10,000 for major repairs • Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

How to calculate the Amortization Expense?
provide answer of both Question please fast it
Consider each of the transactions below independently. All of the expenditures were made in cash. 1. During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $300,000, of which 30% occurred before the technological feasibility of the product had been established. 2. Xon Corporation paid $50,000 to complete overhaul of the plumbing system (old costs unknown). 3. The Johnson Company disposed of an old machine with an original cost of $8,000 and a book value of $4,000 and received $3,000. Required: Prepare journal entries to record each of the above transactions. Note: You may create a table as follows to organize your journal entries. Date Account titles Debit Credit 1 Cash 10,000 Sales Revenue 10,000 Edit Format Table Paragraph v в I U A 12pt v
2
Long Term Assets: , #13
None
2. Mark Company
! Required information Problem 7-5B Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] Cheetah Copy purchased a new copy machine. The new machine cost $110,000 including installation. The company estimates the equipment will have a residual value of $27,500. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Hours Used 2,000 1,600 2,000 3,200 Year 1 2 4 Problem 7-5B Part 2 2. Prepare a depreciation schedule for four years using the double-declining-balance method. (Hint: The asset will be depreciated in only two years.) (Do not round your intermediate calculations.) X Answer is complete but not entirely correct. CHEETAΗ COPY Depreciation Schedule-Double-Declining-Balance End of Year Amounts Depreciation Accumulated Year Вook Value Danreaintion Evnanse
8.8 A new drill press was purchased for $95,000 by trading in a similar machine that had a book value of $25,000. Assuming that the trade-in allowance is $20,000 and that $75,000 cash is to be paid for the new asset, what is the cost basis of the new asset for book depreciation purposes?
Required information [The following information applies to the questions displayed below.] Super Saver Groceries purchased store equipment for $40,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $3,000. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Super Saver used the equipment for 1,200 hours the first year. Required: Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.) 1. Straight-line. Depreciation expense
17. Mohamed Company purchased a delivery truck for $30,000 on January 1, 2012. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2012 and 12,000 in 2013. Instructions (a) Compute depreciation expense for 2012 and 2013 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method. (b) Assume that Mohamed uses the straight-line method. (1) Prepare the journal entry to record 2012 depreciation. (2) Show how the truck would be reported in the December 31, 2012, balance sheet. 18. The Fahim Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Ahmed $45,000 and Bader $20,000. The firm is liquidated, and $110,000 in cash is received for the noncash assets. Ahmed and Bader income ratios are 60% and 40%, respectively. Instructions Prepare a schedule of…
es Required information. [The following information applies to the questions displayed below.] Bridge City Consulting bought a building and the land on which it is located for $135,000 cash. The land is estimated to represent 50 percent of the purchase price. The company paid $6,000 for building renovations before it was ready for use. 3. Compute straight-line depreciation on the building at the end of one year, assuming an estimated 10-year useful life and a $4,000 estimated residual value. (Do not round intermediate calculations.) 4. What should be the book value of (a) the land and (b) the building at the end of year 2? Straight-Line Depreciation 3 4(a) Land 4(b) Building