Required Information [The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $28,000 cash (estimated useful life, seven years). b. On January 1, purchased another business for $164,000 cash, including $10,000 for goodwill. The assets included accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $142,000 (with a residual value of $15,000 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $15,600. The company uses straight-line depreciation. The lease will expire in three years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $5,500 during the current year. e. On December 31 of the current year, sold Machine A for $6,000 cash. Original cost was $25,000; accumulated depreciation to December 31 of the prior year was $16,000 (on a straight-line basis with a $5,000 residual value and five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2). f. On December 31 of the current year, paid $5,000 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $31,000; accumulated depreciation to December 31 of the prior year was $1,600 (on a straight-line basis with a $7,000 residual value and 15-year useful life). "equired: Record journal entries for transactions (a) through (f). lote: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.
Required Information [The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $28,000 cash (estimated useful life, seven years). b. On January 1, purchased another business for $164,000 cash, including $10,000 for goodwill. The assets included accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $142,000 (with a residual value of $15,000 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $15,600. The company uses straight-line depreciation. The lease will expire in three years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $5,500 during the current year. e. On December 31 of the current year, sold Machine A for $6,000 cash. Original cost was $25,000; accumulated depreciation to December 31 of the prior year was $16,000 (on a straight-line basis with a $5,000 residual value and five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2). f. On December 31 of the current year, paid $5,000 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $31,000; accumulated depreciation to December 31 of the prior year was $1,600 (on a straight-line basis with a $7,000 residual value and 15-year useful life). "equired: Record journal entries for transactions (a) through (f). lote: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please & Thanks In Advance
![Required Information
[The following information applies to the questions displayed below.]
During the current year ending on December 31, BSP Company completed the following transactions:
a. On January 1, purchased a patent for $28,000 cash (estimated useful life, seven years).
b. On January 1, purchased another business for $164,000 cash, including $10,000 for goodwill. The assets included
accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $142,000 (with a
residual value of $15,000 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an
indefinite life.
c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $15,600. The
company uses straight-line depreciation. The lease will expire in three years. (Amounts spent to enhance leased
property are capitalized as intangible assets called Leasehold Improvements.)
d. Total expenditures for ordinary repairs were $5,500 during the current year.
e. On December 31 of the current year, sold Machine A for $6,000 cash. Original cost was $25,000; accumulated
depreciation to December 31 of the prior year was $16,000 (on a straight-line basis with a $5,000 residual value and
five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2).
f. On December 31 of the current year, paid $5,000 for a complete reconditioning of Machine B acquired on January 1 of
the prior year. Original cost, $31,000; accumulated depreciation to December 31 of the prior year was $1,600 (on a
straight-line basis with a $7,000 residual value and 15-year useful life).
Required:
Record journal entries for transactions (a) through (f).
Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field.
View transaction list
Journal entry worksheet
1 2
<
Record the $28,000 purchase of patent for cash on January 1.
3 4 5 6 7
Note: Enter debits before credits.
Transaction
Record entry
General Journal
Clear entry
Debit
Credit
View general journal](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7b1243b-47fb-4bd0-b294-b1dba514b94a%2F83728a6d-c96d-4e1c-96c5-2a964b136653%2Fpz4725_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
During the current year ending on December 31, BSP Company completed the following transactions:
a. On January 1, purchased a patent for $28,000 cash (estimated useful life, seven years).
b. On January 1, purchased another business for $164,000 cash, including $10,000 for goodwill. The assets included
accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $142,000 (with a
residual value of $15,000 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an
indefinite life.
c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $15,600. The
company uses straight-line depreciation. The lease will expire in three years. (Amounts spent to enhance leased
property are capitalized as intangible assets called Leasehold Improvements.)
d. Total expenditures for ordinary repairs were $5,500 during the current year.
e. On December 31 of the current year, sold Machine A for $6,000 cash. Original cost was $25,000; accumulated
depreciation to December 31 of the prior year was $16,000 (on a straight-line basis with a $5,000 residual value and
five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2).
f. On December 31 of the current year, paid $5,000 for a complete reconditioning of Machine B acquired on January 1 of
the prior year. Original cost, $31,000; accumulated depreciation to December 31 of the prior year was $1,600 (on a
straight-line basis with a $7,000 residual value and 15-year useful life).
Required:
Record journal entries for transactions (a) through (f).
Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field.
View transaction list
Journal entry worksheet
1 2
<
Record the $28,000 purchase of patent for cash on January 1.
3 4 5 6 7
Note: Enter debits before credits.
Transaction
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
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