Question 1A. Caro Inc. purchases a delivery truck for $18,000. Thetruck has a salvage value of $4,000 and is expected to be driven for 124,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 24,000 miles. Calculate the annual depreciation expense.B. A $40,000, three-month, 5% note payable was issued on December 1, 2016. What is the amount of accrued interest on December 31, 2016? C. Barter Inc. issued bonds with a $400,000 face value, 10% interest rate, and a 4-year term on July 1, 2020, and received $440,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions.1) July 1, 2020: entry to record issuing the bonds 2) Dec. 31, 2020: entry to record payment of interest to bondholders 3) Dec. 31, 2020: entry to record amortization of premiumQuestion 2 Autumn Corporation was organized in July. It is authorized to issue 100,000 shares of $100 par value 6% preferred stock. It is also authorized to issue 500,000 shares of $4 par value common stock. Journalize the transactions below: Aug. 22Issued 2,000 shares of preferred stock at $104 per share. Sep. 3Issued 80,000 shares of common stock at $15.25 per share. Oct. 11Issued 12,000 shares of common stock for land valued at $146,000. The stock is currently trading at $12 per share, and the stock’s trading value is a more accurate determinant of the land’s value. Nov. 12Issued 5,000 shares of common stock at $12 per share. Dec. 5Issued 1,000 shares of preferred stock at $110 per share. Question 3The partnership of John and Judy shares profits and losses in a 60:40 ratios respectively after Sarah receives a 10,000 salary and Rick receives a 15,000 salary. A. Prepare a schedule showing how the profit of $60,000 should be divided and show the resulting journal entry to each partner’s capital account. B. Prepare a schedule showing how the loss of ($8,000) should be divided and show the resulting journal entries to each partner’s capital account. C. What are five (5) Characteristics of a Partnership. Question 4 Required:Use the following excerpts from Yardley Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.

Hi studentSince there are multiple questions, we will answer only first question.Depreciation is the…

Answered: Question 1 A. Caro Inc. purchases a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question 1

A. Caro Inc. purchases a delivery truck for $18,000. Thetruck has a salvage value of $4,000 and is expected to be driven for 124,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 24,000 miles. Calculate the annual depreciation expense.

B. A $40,000, three-month, 5% note payable was issued on December 1, 2016. What is the amount of accrued interest on December 31, 2016?

C. Barter Inc. issued bonds with a $400,000 face value, 10% interest rate, and a 4-year term on July 1, 2020, and received $440,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions.

1) July 1, 2020: entry to record issuing the bonds

2) Dec. 31, 2020: entry to record payment of interest to bondholders

3) Dec. 31, 2020: entry to record amortization of premium

Question 2

Autumn Corporation was organized in July. It is authorized to issue 100,000 shares of $100 par value 6% preferred stock. It is also authorized to issue 500,000 shares of $4 par value common stock. Journalize the transactions below:

Aug. 22	Issued 2,000 shares of preferred stock at $104 per share.
Sep. 3	Issued 80,000 shares of common stock at $15.25 per share.
Oct. 11	Issued 12,000 shares of common stock for land valued at $146,000. The stock is currently trading at $12 per share, and the stock’s trading value is a more accurate determinant of the land’s value.
Nov. 12	Issued 5,000 shares of common stock at $12 per share.
Dec. 5	Issued 1,000 shares of preferred stock at $110 per share.

Question 3

The partnership of John and Judy shares profits and losses in a 60:40 ratios respectively after Sarah receives a 10,000 salary and Rick receives a 15,000 salary.

A. Prepare a schedule showing how the profit of $60,000 should be divided and show the resulting journal entry to each partner’s capital account.

B. Prepare a schedule showing how the loss of ($8,000) should be divided and show the resulting journal entries to each partner’s capital account.

C. What are five (5) Characteristics of a Partnership.

Question 4

Required:

Use the following excerpts from Yardley Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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