The following selected transactions for Leaf Industries, operating in New Brunswick occurred in 2016 and 2017. The company's year-end is December 31. 2016 Purchased land, building and equipment for $320,000 by signing a note payable. The appraised values for the new assets are: Land $138,000, Building $276,000, equipment $46,000. The building will be amortized using the straight-line method over 20 years with a $50,000 residual value. The equipment will be amortized over 4 years with no residual value using the double declining balance method. Paid $8,000 to improve the efficiency of the equipment. Apr 1 29 Purchased a vehicle for $15,000 bv signing a note. The vehicle has a residual value of $3,000 and it is estimated that the car will be driven 150,000 km over its useful life. The units of production method will be used to amortize this asset. Jun 3 Purchased a patent paving S25,920 cash. The remaining useful life of the Dec patient is 4 vears and has no residual value.
The following selected transactions for Leaf Industries, operating in New Brunswick occurred in 2016 and 2017. The company's year-end is December 31. 2016 Purchased land, building and equipment for $320,000 by signing a note payable. The appraised values for the new assets are: Land $138,000, Building $276,000, equipment $46,000. The building will be amortized using the straight-line method over 20 years with a $50,000 residual value. The equipment will be amortized over 4 years with no residual value using the double declining balance method. Paid $8,000 to improve the efficiency of the equipment. Apr 1 29 Purchased a vehicle for $15,000 bv signing a note. The vehicle has a residual value of $3,000 and it is estimated that the car will be driven 150,000 km over its useful life. The units of production method will be used to amortize this asset. Jun 3 Purchased a patent paving S25,920 cash. The remaining useful life of the Dec patient is 4 vears and has no residual value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![The following selected transactions for Leaf Industries, operating in New Brunswick
occurred in 2016 and 2017. The company's year-end is December 31.
2016
Purchased land, building and equipment for $320,000 by signing a note
payable. The appraised values for the new assets are: Land $138,000, Building
$276,000, equipment $46,000. The building will be amortized using the
straight-line method over 20 years with a $50,000 residual value. The
equipment will be amortized over 4 years with no residual value using the
double declining balance method.
Paid $8,000 to improve the efficiency of the equipment.
Purchased a vehicle for $15,000 bv signing a note. The vehicle has a residual
Apr
Jun
29
value of $3,000 and it is estimated that the car will be driven 150,000 km over its
useful life. The units of production method will be used to amortize this asset.
Purchased a patent paving S25,920 cash.
The remaining useful life of the
Dec
3
patient is 4 vears and has no residual value.
31
Recorded amortization on the assets. The vehicle was driven 26,000 km in
2016.
2017
The vehicle purchased last vear proved to be very unreliable so the company
sold it for $5,000. The vehicle had been driven 32,000 km in 2017
Dec
After using the building for a vear the company estimated that wear and tear
on the building would force replacement in 15 vears instead of 20.
31
31
Record amortization on the assets.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1d39f439-c0df-4260-bff7-863bf3eaa9a0%2Fe3252aee-54b0-46e4-a0d3-14979a4057d7%2Fvdi33ad_processed.png&w=3840&q=75)
Transcribed Image Text:The following selected transactions for Leaf Industries, operating in New Brunswick
occurred in 2016 and 2017. The company's year-end is December 31.
2016
Purchased land, building and equipment for $320,000 by signing a note
payable. The appraised values for the new assets are: Land $138,000, Building
$276,000, equipment $46,000. The building will be amortized using the
straight-line method over 20 years with a $50,000 residual value. The
equipment will be amortized over 4 years with no residual value using the
double declining balance method.
Paid $8,000 to improve the efficiency of the equipment.
Purchased a vehicle for $15,000 bv signing a note. The vehicle has a residual
Apr
Jun
29
value of $3,000 and it is estimated that the car will be driven 150,000 km over its
useful life. The units of production method will be used to amortize this asset.
Purchased a patent paving S25,920 cash.
The remaining useful life of the
Dec
3
patient is 4 vears and has no residual value.
31
Recorded amortization on the assets. The vehicle was driven 26,000 km in
2016.
2017
The vehicle purchased last vear proved to be very unreliable so the company
sold it for $5,000. The vehicle had been driven 32,000 km in 2017
Dec
After using the building for a vear the company estimated that wear and tear
on the building would force replacement in 15 vears instead of 20.
31
31
Record amortization on the assets.
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