(a) Introduction: Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet . Depreciation charged on the tangible assets. Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright. To choose: What is the amount of depreciation and amortization expense that each company reported for the 3 year?

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Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

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Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…

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Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Expert Solution & Answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Answer 6

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

Answer 7

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

Answer 8

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

Answer 9

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

Answer 10

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Answer 11

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Answer 12

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Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - How does the cost concept affect accounting for...Ch. 7 - Prob. 4DQ Ch. 7 - Prob. 5DQ Ch. 7 - Prob. 6DQ Ch. 7 - What factors must be known or estimated in order...Ch. 7 - How do the accelerated and straight-line...Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ

Solution Summary: The author explains that depreciation is the non-cash expense, which is shown in the debit side of the profit and loss accounts, and reduced from the assets form the balance sheet.

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