Connect Access Card for Financial Accounting
9th Edition
ISBN: 9781259738678
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Chapter 8, Problem 8.8P
1.
To determine
Indicate the accounts, amounts, and effects of the given transactions on the
2.
To determine
Compute the
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P8-8 Part 1
b.
P8-8 (Algo) Determining Financial Statement Effects of Activities Related to Various Long-Lived Assets
LO8-2, 8-3, 8-6
[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 $34,300 cash (estimated useful life, seven years).
b. On January 1, purchased the assets (not detailed) of another business for $159,000 cash, including $9,000 for goodwill.
The company assumed no liabilities. Goodwill has an indefinite life.
Required:
1. For each of these transactions, indicate the accounts, amounts, and effects (+ for increase and for decrease) on the accounting
equation.
C
c. On December 31, constructed a storage shed on land leased from D. Heald. The cost was $30,600. The company uses
straight-line depreciation. The lease will expire in ten years. (Amounts spent to enhance leased property are capitalized as
intangible assets…
P8-6 (Algo) Recording Journal Entries Related to Various Long-Lived Assets LO8-2, 8-3, 8-6
[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 $48,000 cash (estimated useful life, ten years).
b. On January 1, purchased another business for $156,000 cash, including $8,000 for goodwill. The assets included
accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $136,000 (with a
residual value of $14,280 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 $26,600.
The company uses straight-line depreciation. The lease will expire in seven years. (Amounts spent to enhance
leased property are capitalized as intangible assets called Leasehold…
Extract from the statement of P&L and OCI of Don Ltd for year ended 30 June 20X8 and the Balance Sheet at 30 June 20X7 and 20X8 are given below.
20X7
20X8
Sales
$2,120,000
Interest revenue
$3,000
Loss on sale of plant and equipment
($25,000)
Current Assets
Interest receivable
$1,500
$3,000
Non-current assets
Plant and equipment (at cost)
$410,000
$425,000
(-) Accumulated depreciation
($85,000)
($102,000)
Loan to CEO
$60,000
$45,000
Current liabilities
Trade Payables
$14,200
$34,250
Additional information:
On 1 January 20X8 Don Ltd sold plant and equipment with a carrying amount of $75,000 (cost $100,000) and received $50,000 cash.
An item of plant and equipment was purchased on 29 June 20X8. Not all of this was paid for with cash. $30,000 of this amount was purchased on credit and is in the trade payables balance at 30 June 20X8.
Don Ltd…
Chapter 8 Solutions
Connect Access Card for Financial Accounting
Ch. 8 - Define long-lived assets. Why are they considered...Ch. 8 - Prob. 2QCh. 8 - What are the classifications of long-lived assets?...Ch. 8 - Prob. 4QCh. 8 - Describe the relationship between the expense...Ch. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - In computing depreciation, three values must be...Ch. 8 - The estimated useful life and residual value of a...Ch. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - Why is depreciation expense added to net income...Ch. 8 - Miga Company and Porter Company both bought a new...Ch. 8 - Leslie, Inc.. followed the practice of...Ch. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQCh. 8 - Prob. 9MCQCh. 8 - (Chapter Supplement) Irish Industries purchased a...Ch. 8 - Prob. 8.1MECh. 8 - Prob. 8.2MECh. 8 - Prob. 8.3MECh. 8 - Prob. 8.4MECh. 8 - Computing Book Value (Double-Declining-Balance...Ch. 8 - Computing Book Value (Units-of-Production...Ch. 8 - Identifying Asset Impairment LO8-4 For each of the...Ch. 8 - Prob. 8.8MECh. 8 - Prob. 8.9MECh. 8 - Prob. 8.10MECh. 8 - Prob. 8.1ECh. 8 - Prob. 8.2ECh. 8 - Computing and Recording Cost and Depreciation of...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Recording Depreciation and Repairs (Straight-Line...Ch. 8 - Prob. 8.7ECh. 8 - Prob. 8.8ECh. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Prob. 8.11ECh. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Computing Depreciation and Book Value for Two...Ch. 8 - Prob. 8.15ECh. 8 - Recording the Disposal of an Asset at Three...Ch. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.22ECh. 8 - (Chapter Supplement) Recording a Change in...Ch. 8 - Prob. 8.24ECh. 8 - Prob. 8.25ECh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Analyzing the Effects of Repairs, an Addition, and...Ch. 8 - Prob. 8.3PCh. 8 - Best Buy Co., Inc., headquartered in Richfield,...Ch. 8 - Evaluating the Effect of Alternative Depreciation...Ch. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Computing Goodwill from the Purchase of a Business...Ch. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Prob. 8.2APCh. 8 - Computing the Acquisition Cost and Recording...Ch. 8 - Prob. 8.4APCh. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.6APCh. 8 - Prob. 8.7APCh. 8 - Asset Acquisition, Depreciation, and Disposal Pool...Ch. 8 - Case A. Dr Pepper Snapple Croup, Inc., is a...Ch. 8 - Prob. 8.1BCOMPCh. 8 - Prob. 8.1CCOMPCh. 8 - Case D. Stewart Company reports the following...Ch. 8 - Case E. Matson Company purchased the following on...Ch. 8 - Prob. 8.1CPCh. 8 - Finding Financial Information LO8-1, 8-2, 8-6...Ch. 8 - Comparing Companies within an Industry Refer to...Ch. 8 - Prob. 8.4CPCh. 8 - Prob. 8.5CPCh. 8 - Prob. 8.6CPCh. 8 - Evaluating the Impact of Capitalized Interest on...
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