Record the purchase of the second piece of equipment December 31, year 1 Record the exchange...

    

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Record the purchase of the second piece of equipment December 31, year 1 Record the exchange of motorcycles January 1, year 1 (assume there is no commercial substance) Record the depreciation for each asset during the year (note that there was an estimate change for the truck) Are the other costs incurred product costs or period costs? With the information , prepare a note for the asset section. (hint, a table would likely be the best way to present the information along with some of the other mandatory disclosures) Information Cost Residual Value Accumulated Depreciation Depreciation method Equipment Costs Life Equipment Cost (before taxes) Freight In Insurance in-transit Canadian Duty (non-refundable) GST on purchase (refundable) PST on purchase (non-refundable) Moving of other equipment in the factory Wages of employee to put equipment together Testing Training on machine Total Costs 180,250 You also come across this document from the start of Year 1 (assume no entries have been made for depreciation for the year) Equipment ? 22,000 Straight line 10 years or 3,000 machine hours Truck 275,000 50,000 45,000 activity method 15 years or 300,000 KM Land 200,000 30,000 double declining 25 years Building 800,000 25,000 150,000 5,000 2,000 2,000 7,500 10,500 64,000 double declining 25 years 500 2,000 500 250 Car 50,000 5,000 18,000 straight line 8 years or 125,000 KM Old Motorcycle 25,000 5,000 6,000 Straight Line 10 years or 200,000 KM Actual Use Current year Other notes on the paper: 200 hours 20,000 KM full year full year sold Jan.1 traded Jan 1 A second piece of equipment was purchased December 31, year 1 in exchange of 2,000 shares of Big Time (no depreciation will be take in year 1). Big Time's shares were trading at $37.50 on the day of the sale and the estimated fair value of the equipment was $78,000. The motorcycle was traded for another motorcycle January 1, year 1. The two motorcycles are about the same age and have the same operating costs. Big Time had to pay an additional $2,000 to complete the trade. The cost of the new motorcycle Big Time will receive (from records provided by the seller) was $27,000 with Accumulated Depreciation of $7,000 and has a fair value of $21,000. The new motorcycle will use the activity method for depreciation and it was not driven during the year. Management reviewed the Truck depreciation and changed the estimate for the year from 15 years / 300,000 KM to 17 years or 375,000 KM Some costs incurred on the assets during the year were: o New tires were put on the truck, $5,000 o Shingles were replaced on the building, $2,000 Record the purchase of the second piece of equipment December 31, year 1 Record the exchange of motorcycles January 1, year 1 (assume there is no commercial substance) Record the depreciation for each asset during the year (note that there was an estimate change for the truck) Are the other costs incurred product costs or period costs? With the information , prepare a note for the asset section. (hint, a table would likely be the best way to present the information along with some of the other mandatory disclosures) Information Cost Residual Value Accumulated Depreciation Depreciation method Equipment Costs Life Equipment Cost (before taxes) Freight In Insurance in-transit Canadian Duty (non-refundable) GST on purchase (refundable) PST on purchase (non-refundable) Moving of other equipment in the factory Wages of employee to put equipment together Testing Training on machine Total Costs 180,250 You also come across this document from the start of Year 1 (assume no entries have been made for depreciation for the year) Equipment ? 22,000 Straight line 10 years or 3,000 machine hours Truck 275,000 50,000 45,000 activity method 15 years or 300,000 KM Land 200,000 30,000 double declining 25 years Building 800,000 25,000 150,000 5,000 2,000 2,000 7,500 10,500 64,000 double declining 25 years 500 2,000 500 250 Car 50,000 5,000 18,000 straight line 8 years or 125,000 KM Old Motorcycle 25,000 5,000 6,000 Straight Line 10 years or 200,000 KM Actual Use Current year Other notes on the paper: 200 hours 20,000 KM full year full year sold Jan.1 traded Jan 1 A second piece of equipment was purchased December 31, year 1 in exchange of 2,000 shares of Big Time (no depreciation will be take in year 1). Big Time's shares were trading at $37.50 on the day of the sale and the estimated fair value of the equipment was $78,000. The motorcycle was traded for another motorcycle January 1, year 1. The two motorcycles are about the same age and have the same operating costs. Big Time had to pay an additional $2,000 to complete the trade. The cost of the new motorcycle Big Time will receive (from records provided by the seller) was $27,000 with Accumulated Depreciation of $7,000 and has a fair value of $21,000. The new motorcycle will use the activity method for depreciation and it was not driven during the year. Management reviewed the Truck depreciation and changed the estimate for the year from 15 years / 300,000 KM to 17 years or 375,000 KM Some costs incurred on the assets during the year were: o New tires were put on the truck, $5,000 o Shingles were replaced on the building, $2,000

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