Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Question
Chapter 11, Problem 11.7BE
To determine
To prepare: Journal entries to record circle city transportation’s activity.
Given information:
Cost incurred for oil changes is $2,000.
Cost incurred for filter changes is $5,000.
Cost incurred for tire rotation is $3,000.
Cost incurred for engine overhaul is $15,000.
Cost for retrofitting buses to function as party busses is $40,000.
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Recording Subsequent Expenditures
The plant building of Xon Corporation is old (estimated remaining useful life is 12 years) and needs continuous maintenance and repairs. The company’s accounts show that the building originally cost $300,000; and accumulated depreciation was $200,000 at the beginning of the current year. During the current year, expenditures relating to the plant building are made.
Prepare the journal entry to record each of the following expenditures , assuming all items are paid in cash.Instructions
Round your answers to the nearest whole number
Record debit accounts in alphabetical order using the first letter of the account name.
1. Continuing, frequent, and low-cost repairs: $17,000
Account Name
Dr.
Cr.
2. Added a new storage shed attached to the building; estimated useful life of 8 years: $36,000
Account Name
Dr.
Cr.
3. Removed roof with original cost, $40,000; replaced it with…
Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to
be made in the special revenue fund will include
Multiple Choice
A credit to Gain on Sale of Equipment.
A debit to Accumulated Depreciation.
A credit to Equipment.
A credit to Other Financing Sources-Proceeds of Sale of Assets.
Oaktree Company purchased new equipment and made the following expenditures:
Purchase price
Sales tax
Freight charges for shipment of equipment
Insurance on the equipment for the first year
Installation of equipment
The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed
above were paid in cash.
Required:
Prepare the necessary journal entries to record the above expenditures. (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
Chapter 11 Solutions
Intermediate Accounting
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