accounting 112

Project Description:

on march 1, 2014, morales company acquired real estate on which it planned to construct a small office building. the company paid $75,000 in cash. an old warehouse on the property was razed at a cost of $8,600; the salvaged materials were sold for $1,700. additional expenditures before construction began included $1,100 attorney's fee for work concerning the land purchase, $5,000 real estate broker's fee, $7,800 architect's fee, and $14,000 to put in driveways and a parking lot.

(a) determine the amount to be reported as the cost of the land.
(b) for each cost not used in part (a), indicate the account to b_e debited.

pérez company purchased a delivery truck for $34,000 on january 1, 2014. the truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. actual miles driven were 15,000 in 2014 and 12,000 in 2015.

compute depreciation expense for 2014 and 2015 using
the straight-line method,
the units-of-activity method, and
the double-declining-balance method.
assume that linton uses the straight-line method.
prepare the journal entry to record 2014 depreciation.
show how the truck would be reported in the december 31, 2014, balance sheet.

presented below are selected transactions at vega company for 2014.
jan.1 retired a piece of machinery that was purchased on january l, 2004. the machine cost $62,000 on that date. it had a useful life of 10 years with no salvage value.
june 30 sold a computer that was purchased on january 1, 1011. the computer cost $45,000. it had a useful life of 5 years with no salvage value. the computer was sold for $14,000.
dec. 31discarded a delivery truck that was purchased on january 1, 2010. the truck cost $33,000. it was depreciated based on a 6-year useful life with a $3,000 salvage value.
journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. vega company uses straight-line depreciation. (assume depreciation is up to date as of december 31, 2013.)

at december 31, 2014, montalvo company reported the following as plant assets.

during 2015, the following selected cash transactions occurred.
april 1 purchased land for $2,130,000.
may 1 sold equipment that cost $750,000 when purchased on january 1, 2011. the equipment was sold for $450,000.
june 1 sold land purchased on june 1, 2005 for $ 1,500,000. the land cost $400,000.
july 1 purchased equipment for $2,500,000.
dec.31 retired equipment that cost $500,000 when purchased on december 31, 2005. no salvage value was received.

(a) journalize the above transactions. the company uses straight-line depreciation for buildings and equipment. the buildings are estimated to have a 5o-year life and no salvage value. the equipment is estimated to have a 10-year useful life and no salvage value. update depreciation on assets disposed of at the time of sale or retirement.
(b) record adjusting entries for depreciation for 2015.
(depreciation expense­ buildings $570,000; equipment $4,800,000)
(c) prepare the plant assets section of montalvo's balance sheet at december 31, 2015.
(total plant assets $61,760 ,000)
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Price Type: Fixed

Project Budget: $0 to $10
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