Questions and Answers of Fundamental Accounting Principles 25th

Linda, Sue, and Darlene are partners in Designs Unlimited. Their capital balances are $150,000, $140,000, and $250,000, respectively, on March 15, 2023. They share profit and losses in the ratio of
Sam, Andrew, and Mary were partners in Gem Skateboard Company. The partners shared profits and losses 3:2:3, respectively. On April 1, 2023, the partnership showed the following account balances just
Toast, a Belleville, Ontario, restaurant, began with investments by the partners as follows: Lea, $233,700; Eva, $177,700; and Sophia, $192,100. The first year of operations did not go well, and the
Assume the same information as in QS 11-18 except that the Equipment was sold for $85,000 on April 1, 2023. Prepare the journal entry to record the final distribution of cash.Data From QS 11-18Sam,
Barry Bowtie incorporated his business under the name BowTie Fishing Expeditions Corp. on March 1, 2023. It was authorized to issue 30,000 $2 cumulative preferred shares and an unlimited number of
Using the information from the alphabetized post-closing trial balance below, prepare a classified balance sheet for Malta Industries Inc. as at October 31, 2023. Be sure to use proper form,
The equity sections from the 2023 and 2024 balance sheets of Fab-Form Industries Inc. appeared as follows:On March 16, June 15, September 5, and November 22, 2021, the board of directors declared
Keri & Nick Consulting’s partners’ equity accounts reflected the following balances on August 31, 2023:Lee and Kalpakian share profit/losses in a 2:3 ratio, respectively. On September 1,
The equity sections from the 2023 and 2024 balance sheets of The Saucy Bread Company Inc. appeared as follows:On February 11, May 24, August 13, and December 12, 2024, the board of directors declared
Walking Bear Resources Inc. Equity Section of the Balance Sheet March 31, 2023Analysis Component:If you are a common shareholder in this company, and the company plans to pay total cash dividends of
Mogul Ltd., a ski boot manufacturer, showed the following amounts for its year just ended October 31, 2023. Prepare a multi-step income statement assuming a tax rate of 25%. $420,000 Operating
Jager Metal Corp. Equity Section of the Balance Sheet November 30, 2023Contributed capital:RequiredRefer to the equity section above. Assume that the preferred shares are convertible into common at a
Rainchief Energy Inc. Equity Section of the Balance Sheet October 31, 2023 Contributed capital:Required1. Calculate A assuming an average issue price of $12 per share.2. Calculate B assuming an
Vision HR Consulting began operations on January 1, 2023. Complete the following schedule with journal entries detailing the transactions during 2023 for Vision HR Consulting under two forms of
On March 31, 2023, Capital Investment Advisers paid $4,570,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was
In 2023, DelCano Properties paid $540,000 for a tract of land on which two buildings were located. The plan was to demolish Building A and build a new factory (Building C) in its place. Building B
The adjusted balances at September 30, 2023, for Xentel Interactive are shown in alphabetical order below:*The owner, Mason Xentel, made no additional investments during the year ended September 30,
At December 31, 2022, Dynamic Exploration’s balance sheet showed total PPE assets of $802,000 and total accumulated depreciation of $339,980 as detailed in the PPE subledger below. Dynamic
On April 12, 2023, Prism Ltd., a camera lens manufacturer, paid cash of $552,375 for real estate plus $29,400 cash in closing costs. The real estate included land appraised at $249,480; land
The adjusted balances at December 31, 2023, for Derlak Enterprises are shown in alphabetical order below:*The owner, Lee Derlak, made no additional investments during the year.RequiredPrepare a
At April 30, 2023, Hackney Building Products’ year-end, the balance sheet showed PPE information as detailed in the schedule below. The company calculates depreciation for partial periods using the
At December 31, 2023, Halifax Servicing’s balance sheet showed capital asset information as detailed in the schedule below. Halifax calculates depreciation to the nearest whole
Edmonton Ice Rink purchased a Zamboni ice-resurfacing machine for $28,000, terms 1/10, n/60, FOB shipping point. Edmonton Ice received a freight invoice from On-time Delivery for $450. Edmonton Ice
On January 2, 2021, Country Lumber installed a computerized machine in its factory at a cost of $168,000. The machine’s useful life was estimated at four years or a total of 190,000 units with a
On August 31, 2023, World Travel Consulting showed the following adjusted account balances in alphabetical order:Required1. Prepare the liability section of the balance sheet at August 31, 2023 based
After planning to build a new plant, Kallisto Backpack Manufacturing purchased a large lot on which a small building was located. The negotiated purchase price for this real estate was $1,200,000 for
What characteristics of a property, plant, and equipment item make it different from other assets, such as accounts receivable or inventory?
On January 2, 2020, Redbook Manufacturing acquired machinery by issuing a 5%, $350,000 note due in six years on January 2, 2026. Annual payments are $68,956 each January 2. The payment schedule
On January 1, 2023, Bona Vista Co. purchased land, a building, equipment, and tools for a total price of $4,320,000, paying cash of $1,104,000 and borrowing the balance from the bank. The bank
Refer to Exercise 9-10. Assume that the only other assets at December 31, 2022, were total current assets of $338,000. Prepare the asset section of Dynamic Exploration’s classified balance sheet at
On May 2, 2023, Uniglobe Satellite Company purchased and installed a new machine that cost $273,000, with a five-year life and an estimated $38,220 residual value. Management estimated that the
The Creative Electronics Company shows the following selected adjusted account balances as at December 31, 2023:RequiredPrepare the current liability section of Creative’s balance sheet. $52,000 in
What are some examples of items to include in the cost of a property, plant, and equipment purchase?
On January 2, 2023, the Casual Elite Co. acquired land to build a distribution centre by issuing a 6%, three-year note for $200,000. The note will be paid in three annual payments of $74,822 each
Brad’s Building Supplies entered into the following transactions involving current liabilities during 2023 and 2024:RequiredPrepare journal entries to record these transactions for Brad’s
On January 1, 2023, La Petite Macaron, a local French bakery, borrowed $84,000 from the bank. Interest is calculated at the rate of 4% and the term of the note is four years. Four equal annual
On November 10, 2023, Singh Electronics began to buy and resell scanners for $55 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that
On November 9, 2023, Snowbot Snow Removal began to buy and resell snow blowers for $700 each. Snowbot uses the perpetual system to account for inventories. The snow blowers are covered under a
Quebec Construction Company purchased some equipment on September 10, 2023, that had a cost of $190,000 (ignore GST/PST). Show the journal entries that would record this purchase and payment under
Heritage Architect Company of Manitoba purchased some modular office furniture on March 10, 2023 that had a cost of $290,000 (ignore GST/PST). Show the journal entries that would record this purchase
The following alphabetized list of selected adjusted account balances is from the records of Jasper Company on December 31, 2023:RequiredPrepare the current liability section of Jasper Company’s
The following items appear on the balance sheet of Crunched Auto Body Repair Shop, which has a 12-month operating cycle. Identify the proper classification of each item. In the space beside each item
MetroConcerts receives $2,000,000 in advance cash ticket sales for a four-date tour for Diana Krall. Record the advance ticket sales as a lump sum as of October 31, 2023. The concerts sold out and no
Suppose Mink Makeup sells $5,600 of makeup (merchandise with a cost of $4,800) for cash on September 30. The sales tax law requires Mink to collect 13% harmonized sales tax on every dollar of
Part 1:Okanagan Refrigeration manufactures and markets commercial refrigeration systems for food trucks and specialized transport trucks. It was disclosed in notes to the company’s financial
On January 2, 2023, Brook Company acquired machinery by issuing a 3%, $360,000 note due in five years on December 31, 2027. Annual payments are $78,608 each December 31. The payment schedule is:
On November 3, 2023, Gamez 2 Go Media exchanged an old computer for a new computer that had a list price of $190,000. The original cost of the old computer was $150,000 and related accumulated
Stone Works is a paving stone installation business that operates from about April to October each year. The company has an outstanding reputation for the quality of its work and as a result
Hinton Designers, located in Quebec, provided $7,300 of services on credit to a client on May 7, 2023. Record Hinton’s entry, including the appropriate GST and PST.
White Water Adventure is a travel adventure business that operates from about April to October each year. The company has an outstanding reputation for the quality of its tours and as a result
Africa Safari is a tour business that operates from about April to October each year. The company has an outstanding reputation for the quality of its tours and as a result prebooks customers a full
On April 14, 2023, Orchid Company, a new Thai restaurant, purchased land and a building for a total price of $540,000, paying cash of $85,000 and borrowing the balance from the bank. The bank
Tundra Tours runs tundra buggy expeditions in northern Manitoba for tourists to catch a glimpse of the abundant caribou, polar bears, and other wildlife. Tundra purchased a tundra buggy on October
On January 1, 2023, Land’s End Construction purchased a used truck for $52,500. A new motor had to be installed to get the truck in good working order; the costs were $21,000 for the motor and
TechCom has provided the following selected account information, in alphabetical order, from its adjusted trial balance at October 31, 2023 (assume normal balances):Prepare the asset section of the
West Coast Tours runs boat tours along the West Coast of British Columbia. On March 5, 2023, it purchased, with cash, a cruising boat for $828,000, having a useful life of 10 years or 13,250 hours,
On January 2, 2023, Crossfire acquired sound equipment for concert performances at a cost of $55,900. The rock band estimated that it would use this equipment for four years, and then sell the
On January 2, 2021, Archer Company, a skateboard manufacturer, installed a computerized machine in its factory at a cost of $150,200. The machine’s useful life was estimated at four years or a
Big Sky Farms Partial Balance Sheet April 30, 20231 The building was purchased on May 3, 2012, and is depreciated to the nearest whole month using the straight-line method. Depreciation is based on
Jackal Energy purchased a transport truck on January 1, 2023, for $305,200 cash. Its estimated useful life is five years or 320,000 kilometres with an estimated residual value of
On January 3, 2023, Xenex Innovations purchased computer equipment for $125,250. The equipment will be used in research and development activities for five years or a total of 8,500 hours and then
ID Watchdog Inc. recently negotiated a lump-sum purchase of several assets from a contractor who was planning to change locations. The purchase was completed on September 30, 2023, at a total cash
Papaya, a specialty greeting card company, purchased a photocopier costing $45,000 on January 1, 2023. The equipment is expected to produce a total of 4,000,000 copies over its productive life. Its
On January 1, 2023, Creative Calligraphy Inc. purchased land, building, equipment, and tools for a total of $2,520,000. An appraisal identified the fair values to be $700,000 (land), $1,120,000
Logic Co. recently negotiated a lump-sum purchase of several assets from a company that was going out of business. The purchase was completed on March 1, 2023, at a total cash price of $1,260,000 and
Patty’s Pies acquired a delivery truck on January 1, 2023, for $86,000. It is expected to last five years and then sell for about $16,000. Calculate depreciation for each year of the truck’s life
A machine that cost $504,000, with a four-year life and an estimated $48,000 residual value, was installed in Haley Company’s factory on September 1, 2023. The factory manager estimated that the
Equipment with an estimated life of 10 years and no expected residual value was purchased on account for $60,000 on March 6, 2023. Assuming a year-end of December 31, calculate depreciation for 2023
VanHoutte Foods bought machinery on September 10, 2021, for $168,000. It was determined that the machinery would be used for six years or until it produced 260,000 units and then would be sold for
The December 31, 2023, adjusted trial balance of Biomedics Inc. showed the following information:1Remaining useful life 15 years; estimated residual value $60,000. 2 Remaining useful life 6 years;
The December 31, 2023, adjusted trial balance of Maritime Manufacturing showed the following information:Early in 2024, the company made a decision to stop making the items produced by the machinery
Refer to the information in QS 9-11. Assume the equipment is depreciated using the double-declining-balance method. Calculate depreciation for 2023 and 2024:a. To the nearest whole monthb. Using the
AbeCo, a luggage manufacturing company, borrowed $75,000 from the bank to purchase a machine that was estimated to produce 120,000 suitcases; its expected residual value is $15,000. During 2023 and
On January 1, 2023, Kaldex Company purchased for $35,720 equipment with an estimated useful life of eight years and an estimated residual value at the end of its life of $4,200. Early in January
Design Pro purchased on October 1, 2022, $110,000 of furniture that was put into service on November 10, 2022. The furniture will be used for five years and then donated to a charity. Complete the
Safety-First Company completed all of its October 31, 2023, adjustments in preparation for preparing its financial statements, which resulted in the following trial balance.Other information:1. All
On February 3, 2023, Secure Software Group purchased the patent for a new software for cash of $220,800. The company expects the software to be sold over the next five years and uses the
Zephyr Minerals completed the following transactions involving machinery.Machine No. 1550 was purchased for cash on April 1, 2023, at an installed cost of $52,900. Its useful life was estimated to be
Garcia Co. owns equipment that cost $76,800, with accumulated depreciation of $40,800. Record the sale of the equipment under the following three separate cases assuming Garcia sells the equipment
Huang Furniture Company showed the following adjusted account balances on September 30, 2023:Prepare the entries to record the following on October 1, 2023:a. Equipment was sold for cash of
Vidéotron Ltée completed the following transactions involving printing equipment.Machine 6690 was purchased for cash on May 1, 2023, at an installed cost of $72,900. Its useful life was estimated
Phantom Company was preparing the annual financial statements and, as part of its year-end procedures, prepared the following alphabetized schedule based on adjusted values at March 31, 2023:What, if
The Hilton Skating Club used straight-line depreciation for a used Zamboni ice-resurfacing machine that cost $43,500, under the assumption it would have a four-year life and a $5,000 trade-in value.
In 2023, Staged Home Ltd. completed the following transactions involving delivery trucks:July 5 Traded in an old truck and paid $25,600 in cash for furniture. The accounting records on July 1 showed
During 2023, Global Designs Inc. had the following transactions.Aug. 31 Traded in furniture with a cost of $42,000 and accumulated depreciation of $25,800 recorded in the accounting records on this
A company pays $760,000 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $60,000 cash to access the mine, which is estimated to hold 100,000 tons of iron.
Vita Water purchased a used machine for $116,900 on January 2, 2023. It was repaired the next day at a cost of $4,788 and installed on a new platform that cost $1,512. The company predicted that the
La Mancha Enterprises completed all of its March 31, 2023, adjustments in preparation for compiling its financial statements, which resulted in the following trial balance.Other information:1. All
Endblast Productions showed the following selected asset balances on December 31, 2023:Land ........................................................................... $396,800Building
On January 1, 2023, Ultra Green Packaging purchased a used machine for $156,000. The next day, it was repaired at a cost of $4,068 and mounted on a new platform that cost $5,760. Management estimated
Every Where Development Co. showed the following selected PPE balances on January 31, 2023:1Remaining estimated useful life is 40,000 kilometres with a residual value of $9,800; depreciated using the
On April 1, 2023, Ice Drilling Co. purchased a trencher for $125,000. The machine was expected to last five years and have a residual value of $12,500.RequiredCalculate depreciation expense for 2023
Class Act Catering Company had a deluxe, portable barbecue with a book value of $7,000 at its December 31, 2022, year-end. The barbecue had an estimated remaining useful life of five years and a $200
On April 3, 2023, David’s Chocolates purchased a machine for $71,200. It was assumed that the machine would have a five-year life and a $15,200 trade-in value. Early in January 2026, it was
On October 1, 2023, Kingsway Broadcasting purchased for $288,000 the copyright to publish the music composed by a local Celtic group. Kingsway expects the music to be sold over the next three years.
At its December 31, 2022, year-end, Athletic Apparel had a warehouse with an adjusted book value of $292,500 and an estimated remaining useful life of 15 years and residual value of $90,000. Because
Dean Carpet Stores owned an automobile with a $15,000 cost that had $13,500 accumulated depreciation as of December 31, 2023. Its fair value on this date was $3,000. On the same day, Dean exchanged
On March 1, 2023, Wallace Company purchased a new machine with a suggested retail price of $123,000. The new machine was to replace an old machine that originally cost $90,000 and had $36,000 of
Huang Resources showed the following alphabetized adjusted trial balance at October 31, 2023:Other information:1. All accounts have normal balances.2. $38,000 of the note payable is due after October
Diaz Company owns a machine that cost $250,000 and has accumulated depreciation of $182,000. Prepare the entry to record the disposal of the machine on January 1 in each separate situation.1. The

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