The following events took place at Pete's Painting Company during 2017: On January 1, Pete bought a used truck for $17,000. He added a tool chest and side racks for ladders for $6,200. The truck is expected to last four years and then be sold for $1,200. Pete uses straight-line depreciation. On January 1, he purchased several items at an auction for $4,420. These items had fair market values as follows: 10 cases of paint trays and roller covers $100 Storage cabinets 2,700 Ladders and scaffolding 4,000 Pete will use all of the paint trays and roller covers this year. The storage cabinets are expected to last nine years; the ladders and scaffolding, four years. On February 1, Pete paid the city $1,728 for a three-year license to operate the business. On September 1, Pete sold an old truck for $4,430 that had cost $11,210 when it was purchased on September 1, 2012. It was expected to last eight years and have a salvage value of $650. Pete used the straight line method of depreciation. Required: 1. For each situation, determine the value assigned to the asset when it is purchased. For (d), determine the book value when it is sold. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. Asset Relevant Value a. Recorded cost of truck $23,200 b. Part 1 - recorded amount of supplies $ b. Part 2 - recorded cost of office furniture $ b. Part 3 - recorded cost of equipment $ c. Recorded cost of prepaid license $ d. Book value of truck at time of sale $ 2. Determine the amount of depreciation or other expense to be recorded for each asset for 2017. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. Asset 2017 Expense Amount a. Truck depreciation $fill in the blank 2770b8035f8bfb8_7 b. Part 1 - supplies expense $fill in the blank 2770b8035f8bfb8_8 b. Part 2 - office furniture depreciation $fill in the blank 2770b8035f8bfb8_9 b. Part 3 - equipment depreciation $fill in the blank 2770b8035f8bfb8_10 c. License amortization $fill in the blank 2770b8035f8bfb8_11 d. Part 1 - old truck depreciation $fill in the blank 2770b8035f8bfb8_12 d. Part 2 - gain/loss on the sale (use the minus sign to indicate a loss) $fill in the blank 2770b8035f8bfb8_13 Feedback Determine value at time of purchase. Use the fair market values of the supplies expense, office furniture and equipment at the time of purchase. Determine value of prepaid license. Compute the amount of the prepaid license expense that is used in the current year. Compute book value of the truck at the time of sale. 3. How would these assets appear on the balance sheet as of December 31, 2017? Pete's Painting Company Balance Sheet (Partial) December 31, 2017 Current assets: Prepaid license $f Property, plant, and equipment: Total property, plant, and equipment, net $

The following events took place at Pete's Painting Company during 2017: On January 1, Pete bought a used truck for $17,000. He added a tool chest and side racks for ladders for $6,200. The truck is expected to last four years and then be sold for $1,200. Pete uses straight-line depreciation. On January 1, he purchased several items at an auction for $4,420. These items had fair market values as follows: 10 cases of paint trays and roller covers $100 Storage cabinets 2,700 Ladders and scaffolding 4,000 Pete will use all of the paint trays and roller covers this year. The storage cabinets are expected to last nine years; the ladders and scaffolding, four years. On February 1, Pete paid the city $1,728 for a three-year license to operate the business. On September 1, Pete sold an old truck for $4,430 that had cost $11,210 when it was purchased on September 1, 2012. It was expected to last eight years and have a salvage value of $650. Pete used the straight line method of depreciation. Required: 1. For each situation, determine the value assigned to the asset when it is purchased. For (d), determine the book value when it is sold. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. Asset Relevant Value a. Recorded cost of truck $23,200 b. Part 1 - recorded amount of supplies $ b. Part 2 - recorded cost of office furniture $ b. Part 3 - recorded cost of equipment $ c. Recorded cost of prepaid license $ d. Book value of truck at time of sale $ 2. Determine the amount of depreciation or other expense to be recorded for each asset for 2017. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. Asset 2017 Expense Amount a. Truck depreciation $fill in the blank 2770b8035f8bfb8_7 b. Part 1 - supplies expense $fill in the blank 2770b8035f8bfb8_8 b. Part 2 - office furniture depreciation $fill in the blank 2770b8035f8bfb8_9 b. Part 3 - equipment depreciation $fill in the blank 2770b8035f8bfb8_10 c. License amortization $fill in the blank 2770b8035f8bfb8_11 d. Part 1 - old truck depreciation $fill in the blank 2770b8035f8bfb8_12 d. Part 2 - gain/loss on the sale (use the minus sign to indicate a loss) $fill in the blank 2770b8035f8bfb8_13 Feedback Determine value at time of purchase. Use the fair market values of the supplies expense, office furniture and equipment at the time of purchase. Determine value of prepaid license. Compute the amount of the prepaid license expense that is used in the current year. Compute book value of the truck at the time of sale. 3. How would these assets appear on the balance sheet as of December 31, 2017? Pete's Painting Company Balance Sheet (Partial) December 31, 2017 Current assets: Prepaid license $f Property, plant, and equipment: Total property, plant, and equipment, net $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following events took place at Pete's Painting Company during 2017:

On January 1, Pete bought a used truck for $17,000. He added a tool chest and side racks for ladders for $6,200. The truck is expected to last four years and then be sold for $1,200. Pete uses straight-line depreciation.
On January 1, he purchased several items at an auction for $4,420. These items had fair market values as follows:

10 cases of paint trays and roller covers $100

Storage cabinets 2,700

Ladders and scaffolding 4,000

Pete will use all of the paint trays and roller covers this year. The storage cabinets are expected to last nine years; the ladders and scaffolding, four years.
On February 1, Pete paid the city $1,728 for a three-year license to operate the business.
On September 1, Pete sold an old truck for $4,430 that had cost $11,210 when it was purchased on September 1, 2012. It was expected to last eight years and have a salvage value of $650. Pete used the straight line method of depreciation.

Required:

1. For each situation, determine the value assigned to the asset when it is purchased. For (d), determine the book value when it is sold. Do not round intermediate calculations. If required, round your final answers to the nearest dollar.

Asset	Relevant Value
a. Recorded cost of truck	$23,200
b. Part 1 - recorded amount of supplies	$
b. Part 2 - recorded cost of office furniture	$
b. Part 3 - recorded cost of equipment	$
c. Recorded cost of prepaid license	$
d. Book value of truck at time of sale	$

2. Determine the amount of depreciation or other expense to be recorded for each asset for 2017. Do not round intermediate calculations. If required, round your final answers to the nearest dollar.

Asset	2017 Expense Amount
a. Truck depreciation	$fill in the blank 2770b8035f8bfb8_7
b. Part 1 - supplies expense	$fill in the blank 2770b8035f8bfb8_8
b. Part 2 - office furniture depreciation	$fill in the blank 2770b8035f8bfb8_9
b. Part 3 - equipment depreciation	$fill in the blank 2770b8035f8bfb8_10
c. License amortization	$fill in the blank 2770b8035f8bfb8_11
d. Part 1 - old truck depreciation	$fill in the blank 2770b8035f8bfb8_12
d. Part 2 - gain/loss on the sale (use the minus sign to indicate a loss)	$fill in the blank 2770b8035f8bfb8_13

Feedback

Determine value at time of purchase. Use the fair market values of the supplies expense, office furniture and equipment at the time of purchase. Determine value of prepaid license.

Compute the amount of the prepaid license expense that is used in the current year. Compute book value of the truck at the time of sale.

3. How would these assets appear on the balance sheet as of December 31, 2017?

Pete's Painting Company
Balance Sheet (Partial)
December 31, 2017
Current assets:
Prepaid license		$f
Property, plant, and equipment:





Total property, plant, and equipment, net		$

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10 cases of paint trays and roller covers	$100
Storage cabinets	2,700
Ladders and scaffolding	4,000