1 On August 1, 2022, Dodd Corporation purchased a piece of manufacturing equipment costing $70,000. In addition, on August 1st, Dodd paid $600 in sales tax, $400 to insure the equipment during transit/delivery, $1,000 to have it assembled upon delivery, and $3,000 for pre-paid future routine maintenance. The useful life of the equipment is estimated to be 8 years or 50,000 hours. At the end of its
useful life the equipment is expected to have a residual value of $7,000. The equipment was operated for 2,000 hours in 2022. The company’s fiscal year is the calendar year. Dodd depreciates its manufacturing equipment using the units-of-activity method.
Required:
a. Prepare a detailed calculation of the total cost to be capitalized for the equipment. Note, this amount is the amount of the debit made to the equipment account to record the asset’s acquisition on August 1st.
b. Prepare a detailed calculation of the depreciation expense to record on the equipment in fiscal 2022.

#2 Below are selected transactions for Idle Company. Prepare journal entries for each transaction
(ignore journal entry descriptions). Idle Company’s fiscal year end is December 31st.
YOU MUST SHOW ALL SUPPORTING CALCULATIONS OR YOU WILL RECEIVE
50% CREDIT. IF NECESSARY, ROUND AMOUNTS TO NEAREST DOLLAR.
Date Transaction Description
04/01/2022 Borrowed from Bridge Bank by issuing a $90,000, 10% note due on 04/01/2023.
06/01/2022 Issued a $30,000, 4-month note to Lou Company for a machine. Lou discounted
the note at 8%.
10/01/2022 Paid Lou Company the amount due.
12/31/2022 Accrued interest on the Bridge Bank note.
04/01/2023 Repaid the amount borrowed from Bridge Bank, including interest.

#3 The Penn & Teller Partnership reports revenue of 82,000 and expenses of 91,000. Partner salary
allowances are Penn $30,000 and Teller $35,000; interest allowances are Penn $8,000 and Teller
$4,000; and the remainder is shared 6:4.
Required
Prepare a detailed calculation of the division of net income/(loss) to each partner AND prepare
the journal entry (a journal entry description is not required) to distribute the net income/(loss).

#4 Below is a comparative balance sheet for Culp Corporation prepared at the end of its current
fiscal year:
202/2021
ASSETS
Cash 181,000 138,000
Accounts Receivable, Net 52,000 70,000
Inventory 35,000 30,000
Long Term Investments 60,000 77,000
Patents 549,000 534,000
Total Assets 877,000 849,000
LIABILITIES & EQUITY
Accounts Payable 50,000 136,000
Salaries Payable 47,000 41,000
Bonds Payable 250,000 200,000
Common Stock 352,000 327,000
Retained Earnings 178,000 145,000
Total Liabilities and Equity 877,000 849,000
Additional Information:
1. Dividends of $13,000 were declared and paid during 2022. There were no dividends
declared in 2021.
2. Long term investments with an original cost of $17,000 were sold in 2022 for $36,000.
No long-term investments were purchased during the year.
3. $86,000 of bonds were issued at face value to acquire patents in 2022. No other
acquisitions of patents were made during the year.
4. Patents were sold for $6,000 in 2022 that originally cost $10,000.
Required
Prepare the operating section of the statement of cash flows for the year ended 12/31/22.

Answer rating: 100% (QA)

1 Equipment Cost Calculation To calculate the total cost to be capitalized for the equipment we need to consider the following costs 1 Purchase cost 7... View the full answer