New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
public accounting
Accounting 23rd Edition Carl S. Warren - Solutions
=+For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.
=+While journalizing transactions reduces the possibility of fraud, it by no means eliminates it. For example, embezzlement can be hidden within the double-entry bookkeeping system by creating fictitious suppliers to whom checks are issue
=+McCollum Company, a furniture wholesaler, acquired new equipment at a cost of$150,000 at the beginning of the fiscal year. The equipment has an estimated life of five years and an estimated residual value of $12,000. Ellen McCollum, the president, has requested information regarding alternative
=+1. Determine the annual depreciation for each of the five years of estimated useful life of the equipment, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method.
=+2. Assume that the equipment was depreciated under the double-declining-balance method. In the first week of the fifth year, the equipment was sold for $10,000.Journalize the entry to record the sale.
=+2. What is the amount of depreciation, using the double-declining-balance method for the second year of use for equipment costing $9,000, with an estimated residual value of $600 and an estimated life of three years?A. $6,000 C. $2,000 B. $3,000 D. $400
=+4. Equipment purchased on January 3, 2008, for$80,000 was depreciated using the straight-line method based upon a 5-year life and $7,500 residual value. The equipment was sold on December
=+31, 2010, for $40,000. What is the gain on the sale of the equipment?A. $3,500 C. $36,500 B. $14,500 D. $43,500
=+1. Which of the following qualities are characteristic of fixed assets? (a) tangible,
=+(b) capable of repeated use in the operations of the business, (c) held for sale in the normal course of business, (d) used rarely in the operations of the business,(e) long-lived.
=+6. Immediately after a used truck is acquired, a new motor is installed at a total cost of $3,175. Is this a capital expenditure or a revenue expenditure?
=+9.a. Does the recognition of depreciation in the accounts provide a special cash fund for the replacement of fixed assets? Explain.
=+b. Describe the nature of depreciation as the term is used in accounting.
=+11. Is it necessary for a business to use the same method of computing depreciation
=+(a) for all classes of its depreciable assets, (b) for financial statement purposes and in determining income taxes?
=+12.a. Under what conditions is the use of an accelerated depreciation method most appropriate?
=+b. Why is an accelerated depreciation method often used for income tax purposes?
=+c. What is the Modified Accelerated Cost Recovery System (MACRS), and under
=+what conditions is it used?
=+14. For some of the fixed assets of a business, the balance in Accumulated Depreciation is exactly equal to the cost of the asset. (a) Is it permissible to record additional depreciation on the assets if they are still useful to the business? Explain.
=+(b) When should an entry be made to remove the cost and the accumulated depreciation from the accounts?
=+15.a. Over what period of time should the cost of a patent acquired by purchase be amortized?
=+b. In general, what is the required accounting treatment for research and development costs?
=+c. How should goodwill be amortized?
=+PE 10-1A Capital and revenue expenditures obj. 1 EE 10-1 p. 445 On October 9, Wonder Inflatables Co. paid $1,150 to install a hydraulic lift and $40 for an air filter for one of its delivery trucks. Journalize the entries for the new lift and air filter expenditures.
=+A building acquired at the beginning of the year at a cost of $485,000 has an estimated residual value of $75,000 and an estimated useful life of 25 years. Determine (a) the depreciable cost, (b) the straight-line rate, and (c) the annual straight-line depreciation.PE 10-2A Straight-line
=+Equipment acquired at the beginning of the year at a cost of $125,000 has an estimated residual value of $5,000 and an estimated useful life of eight years. Determine (a) the depreciable cost, (b) the straight-line rate, and (c) the annual straight-line depreciation.PE 10-2B Straight-line
=+A truck acquired at a cost of $134,000 has an estimated residual value of $35,000, has an estimated useful life of 300,000 miles, and was driven 52,000 miles during the year.
=+Determine (a) the depreciable cost, (b) the depreciation rate, and (c) the units-ofproduction depreciation for the year.
=+PE 10-4B Double-decliningbalance depreciation obj. 2 EE 10-4 p. 450 Practice Exercises 470 Chapter 10 Fixed Assets and Intangible Assets Equipment with a cost of $250,000 has an estimated residual value of $34,000, has an estimated useful life of 18 years, and is depreciated by the straight-line
=+PE 10-5A Revision of depreciation obj. 2 EE 10-5 p. 453 A truck with a cost of $80,000 has an estimated residual value of $15,000, has an estimated useful life of eight years, and is depreciated by the straight-line method.(a) Determine the amount of the annual depreciation. (b) Determine the
=+PE 10-5B Revision of depreciation obj. 2 EE 10-5 p. 453 Equipment was acquired at the beginning of the year at a cost of $324,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of eight years and an estimated residual value of $43,000.
=+a. What was the depreciation for the first year?
=+b. Assuming the equipment was sold at the end of the second year for $200,000, determine the gain or loss on the sale of the equipment.
=+c. Journalize the entry to record the sale.
=+PE 10-6A Sale of equipment obj. 3 EE 10-6 p. 456 Equipment was acquired at the beginning of the year at a cost of $160,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 15 years and an estimated residual value of $17,500.
=+a. What was the depreciation for the first year?
=+b. Assuming the equipment was sold at the end of the sixth year for $90,000, determine the gain or loss on the sale of the equipment.
=+c. Journalize the entry to record the sale.
=+PE 10-6B Sale of equipment obj. 3 EE 10-6 p. 456 Montana Mining Co. acquired mineral rights for $120,000,000. The mineral deposit is estimated at 200,000,000 tons. During the current year, 31,155,000 tons were mined and sold.
=+a. Determine the depletion rate.
=+b. Determine the amount of depletion expense for the current year.
=+c. Journalize the adjusting entry on December 31 to recognize the depletion expense.
=+PE 10-7A Depletion obj. 4 EE 10-7 p. 457 Cooke City Mining Co. acquired mineral rights for $50,000,000. The mineral deposit is estimated at 125,000,000 tons. During the current year, 42,385,000 tons were mined and sold.a. Determine the depletion rate.
=+b. Determine the amount of depletion expense for the current year.
=+c. Journalize the adjusting entry on December 31 to recognize the depletion expense.
=+PE 10-7B Depletion obj. 4 EE 10-7 p. 457 On December 31, it was estimated that goodwill of $500,000 was impaired. In addition, a patent with an estimated useful economic life of eight years was acquired for $388,000 on July 1.
=+a. Journalize the adjusting entry on December 31 for the impaired goodwill.
=+b. Journalize the adjusting entry on December 31 for the amortization of the patent rights.
=+PE 10-8A Impaired goodwill and amortization of patent obj. 5 EE 10-8 p. 460 Chapter 10 Fixed Assets and Intangible Assets 471 On December 31, it was estimated that goodwill of $875,000 was impaired. In addition, a patent with an estimated useful economic life of 17 years was acquired for $425,000
=+a. Journalize the adjusting entry on December 31 for the impaired goodwill.
=+b. Journalize the adjusting entry on December 31 for the amortization of the patent rights.
=+Catherine Simpkins owns and operates Speedy Print Co. During February, Speedy Print Co. incurred the following costs in acquiring two printing presses. One printing press was new, and the other was used by a business that recently filed for bankruptcy.Costs related to new printing press:1. Sales
=+5. New parts to replace those damaged in unloading 6. Fee paid to factory representative for installation Costs related to used printing press:
=+7. Fees paid to attorney to review purchase agreement 8. Freight
=+9. Installation 10. Repair of vandalism during installation
=+11. Replacement of worn-out parts 12. Repair of damage incurred in reconditioning the press
=+a. Indicate which costs incurred in acquiring the new printing press should be debited to the asset account.
=+b. Indicate which costs incurred in acquiring the used printing press should be debited to the asset account.
=+EX 10-3 Determine cost of land obj. 1✔ $327,425 Fastball Delivery Company acquired an adjacent lot to construct a new warehouse, paying $30,000 and giving a short-term note for $270,000. Legal fees paid were $1,425, delinquent taxes assumed were $12,000, and fees paid to remove an old building
=+EX 10-4 Capital and revenue expenditures obj. 1 Connect Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service:
=+1. Replaced a truck’s suspension system with a new suspension system that allows for the delivery of heavier loads.
=+2. Installed a hydraulic lift to a van.472 Chapter 10 Fixed Assets and Intangible Assets Chapter 10 Fixed Assets and Intangible Assets 473 3. Repaired a flat tire on one of the vans.
=+4. Overhauled the engine on one of the trucks purchased three years ago.5. Removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication.
=+6. Rebuilt the transmission on one of the vans that had been driven 40,000 miles. The van was no longer under warranty.7. Changed the radiator fluid on a truck that had been in service for the past four years.
=+8. Tinted the back and side windows of one of the vans to discourage theft of contents.9. Changed the oil and greased the joints of all the trucks and vans.
=+10. Installed security systems on four of the newer trucks.Classify each of the costs as a capital expenditure or a revenue expenditure.
=+EX 10-5 Capital and revenue expenditures obj. 1 Jaime Baldwin owns and operates Love Transport Co. During the past year, Jaime incurred the following costs related to an 18-wheel truck:1. Changed engine oil.2. Installed a wind deflector on top of the cab to increase fuel mileage.3. Replaced fog
=+5. Replaced a headlight that had burned out.6. Removed the old CB radio and replaced it with a newer model with a greater range.7. Replaced the old radar detector with a newer model that detects the KA frequencies now used by many of the state patrol radar guns. The detector is wired directly
=+8. Replaced the hydraulic brake system that had begun to fail during his latest trip through the Rocky Mountains.9. Installed a television in the sleeping compartment of the truck.
=+10. Replaced a shock absorber that had worn out.Classify each of the costs as a capital expenditure or a revenue expenditure.
=+EX 10-6 Capital and revenue expenditures obj. 1 Easy Move Company made the following expenditures on one of its delivery trucks:Feb. 16. Replaced transmission at a cost of $3,150.July 15. Paid $1,100 for installation of a hydraulic lift.Oct. 3. Paid $72 to change the oil and air filter.Prepare
=+EX 10-7 Nature of depreciation obj. 2 Legacy Ironworks Co. reported $3,175,000 for equipment and $2,683,000 for accumulated depreciation—equipment on its balance sheet.
=+Does this mean (a) that the replacement cost of the equipment is $3,175,000 and
=+(b) that $2,683,000 is set aside in a special fund for the replacement of the equipment?Explain.
=+EX 10-8 Straight-line depreciation rates obj. 2✔c. 10%Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage, assuming that the residual value of the fixed asset is to be ignored: (a) 2 years, (b) 8 years, (c) 10 years, (d) 20 years,
=+EX 10-9 Straight-line depreciation obj. 2✔ $3,350 A refrigerator used by a meat processor has a cost of $93,750, an estimated residual value of $10,000, and an estimated useful life of 25 years. What is the amount of the annual depreciation computed by the straight-line method?474 Chapter 10
=+EX 10-10 Depreciation by units-of-production method obj. 2✔ $276 A diesel-powered tractor with a cost of $145,000 and estimated residual value of $7,000 is expected to have a useful operating life of 75,000 hours. During July, the generator was operated 150 hours. Determine the depreciation for
=+EX 10-11 Depreciation by units-of-production method obj. 2✔a. Truck #1, credit Accumulated Depreciation, $6,670
=+Prior to adjustment at the end of the year, the balance in Trucks is $250,900 and the balance in Accumulated Depreciation—Trucks is $88,200. Details of the subsidiary ledger are as follows:Accumulated Miles Estimated Estimated Depreciation Operated Truck Residual Useful at Beginning During No.
=+a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year.b. Journalize the entry to record depreciation for the year.
=+EX 10-12 Depreciation by two methods obj. 2✔a. $3,750 A Kubota tractor acquired on January 9 at a cost of $75,000 has an estimated useful life of 20 years. Assuming that it will have no residual value, determine the depreciation for each of the first two years (a) by the straight-line method
=+EX 10-13 Depreciation by two methods obj. 2✔a. $19,000 A storage tank acquired at the beginning of the fiscal year at a cost of $172,000 has an estimated residual value of $20,000 and an estimated useful life of eight years.Determine the following: (a) the amount of annual depreciation by the
=+EX 10-14 Partial-year depreciation obj. 2✔a. First year, $2,000 Sandblasting equipment acquired at a cost of $85,000 has an estimated residual value of $5,000 and an estimated useful life of 10 years. It was placed in service on October 1 of the current fiscal year, which ends on December 31.
=+EX 10-15 Revision of depreciation obj. 2✔a. $17,500 A building with a cost of $1,050,000 has an estimated residual value of $420,000, has an estimated useful life of 36 years, and is depreciated by the straight-line method. (a) What is the amount of the annual depreciation? (b) What is the book
=+EX 10-16 Capital expenditure and depreciation objs. 1, 2✔b. Depreciation Expense, $600 Crane Company purchased and installed carpet in its new general offices on March 30 for a total cost of $12,000. The carpet is estimated to have a 15-year useful life and no residual value.a. Prepare the
=+b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Crane Company uses the straight-line method.Chapter 10 Fixed Assets and Intangible Assets 475
=+EX 10-17 Entries for sale of fixed asset obj. 3 Equipment acquired on January 3, 2007, at a cost of $504,000, has an estimated useful life of 12 years, has an estimated residual value of $42,000, and is depreciated by the straight-line method.
=+a. What was the book value of the equipment at December 31, 2010, the end of the year?
=+b. Assuming that the equipment was sold on April 1, 2011, for $315,000, journalize the entries to record (1) depreciation for the three months until the sale date, and(2) the sale of the equipment.
=+EX 10-18 Disposal of fixed asset obj. 3✔b. $177,750 Equipment acquired on January 3, 2007, at a cost of $265,500, has an estimated useful life of eight years and an estimated residual value of $31,500.a. What was the annual amount of depreciation for the years 2007, 2008, and 2009, using the
=+b. What was the book value of the equipment on January 1, 2010?
=+c. Assuming that the equipment was sold on January 4, 2010, for $168,500, journalize the entry to record the sale.
=+d. Assuming that the equipment had been sold on January 4, 2010, for $180,000 instead of $168,500, journalize the entry to record the sale.
=+EX 10-19 Depletion entries obj. 4✔a. $2,475,000 Cikan Mining Co. acquired mineral rights for $16,200,000. The mineral deposit is estimated at 90,000,000 tons. During the current year, 13,750,000 tons were mined and sold.a. Determine the amount of depletion expense for the current year.
=+b. Journalize the adjusting entry to recognize the depletion expense.
=+Isolution Company acquired patent rights on January 4, 2007, for $750,000. The patent has a useful life equal to its legal life of 15 years. On January 7, 2010, Isolution successfully defended the patent in a lawsuit at a cost of $90,000.
=+a. Determine the patent amortization expense for the current year ended December 31, 2010.b. Journalize the adjusting entry to recognize the amortization.
=+EX 10-21 Book value of fixed assets obj. 6 Apple Computer, Inc., designs, manufactures, and markets personal computers and related software. Apple also manufactures and distributes music players (Ipod)along with related accessories and services including the online distribution of third-party
=+Property, Plant, and Equipment (in millions):Current Preceding Year Year Land and buildings $626 $361 Machinery, equipment, and internal-use software 595 470 Office furniture and equipment 94 81 Other fixed assets related to leases 760 569 Accumulated depreciation and amortization 794 664
Showing 3700 - 3800
of 7256
First
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Last
Step by Step Answers
Get 50% OFF
Claim Now
