A. On March 18, 2022, Tinsle paid cash $440,000 tor land, buildings, and equipment in a...
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A. On March 18, 2022, Tinsle paid cash $440,000 tor land, buildings, and equipment in a lump- sum purchase. An appraisal that cost Tinsle $10,000 revealed fair market values of $200,000 for the land, $150,000 for the buildings, and $150,000 for the equipment. Allocate the acquisition cost to the three items and prepare the journal entry to record the acquisition. (10 points) B. The Fisher Company purchased a machine on October 1, 2020, for $80,000. At the time of acquisition, the machine was estimated to have a useful life of five years and an estimated salvage of $5,000. Fisher has recorded depreciation using the straight-line method. On April 1, 2022, the machine was sold for $50,000. The company's fiscal year end is Dec 31. It calculates depreciation on a monthly basis, and no depreciation was recorded for 2022 yet. Record the journal entries for 2022 related to the disposal of the machine. (10 points) C. The Heavy Equipment Company decided to replace a gasoline engine with a more efficient diesel engine in one of its cranes. The new engine cost $12,000, which Heavy paid in cash. The old engine is discarded at no cost to Heavy Equipment. The old gasoline engine is carried on the books at a cost of $8,000 with accumulated depreciation of $6,000. Prepare the required journal entry for Heavy Equipment Company (10 points). A. On March 18, 2022, Tinsle paid cash $440,000 tor land, buildings, and equipment in a lump- sum purchase. An appraisal that cost Tinsle $10,000 revealed fair market values of $200,000 for the land, $150,000 for the buildings, and $150,000 for the equipment. Allocate the acquisition cost to the three items and prepare the journal entry to record the acquisition. (10 points) B. The Fisher Company purchased a machine on October 1, 2020, for $80,000. At the time of acquisition, the machine was estimated to have a useful life of five years and an estimated salvage of $5,000. Fisher has recorded depreciation using the straight-line method. On April 1, 2022, the machine was sold for $50,000. The company's fiscal year end is Dec 31. It calculates depreciation on a monthly basis, and no depreciation was recorded for 2022 yet. Record the journal entries for 2022 related to the disposal of the machine. (10 points) C. The Heavy Equipment Company decided to replace a gasoline engine with a more efficient diesel engine in one of its cranes. The new engine cost $12,000, which Heavy paid in cash. The old engine is discarded at no cost to Heavy Equipment. The old gasoline engine is carried on the books at a cost of $8,000 with accumulated depreciation of $6,000. Prepare the required journal entry for Heavy Equipment Company (10 points).
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Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
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Authors: Gary A. Porter, Curtis L. Norton
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