Answer p7.27

Chapter 7 Long An Nou Cake the depreciation Experie for each of the first three years on the headachading using cacar throwing methods Does the selection of decision method affect company cash from operatin ways Capitaine era ExpensDuring the year, New Parts Company recedit production line in order to modate the request parts for new car models. The rooling were capitalized to New Pants balance showny observers suggested that the tooling cots should have been charged ist income at the time wenduse rather than capitalized to the company halance sheet Ir New Parts Company with from capitalizing and amortizing the cost of rooling to immediately expensing PUT Tatangible Assets. Elite Records & Music, Inc., had a balance sheet loaded with intangible acts copy Required Straight line 2. Dowie-declining Required te for reporting to shutilvaliders only), indicate how the following financial statement inees would be affected: 5. Liabilities 1. Operating revenue 2. Operating expenses 3 Cach Now from operations Required 7.28 rights on music, goodwill from various prior acquisitions, and internet customer lists purchased from other online music retailers. During the year, several accounting policy decisions were required regarding various intangible asset-related expenditures. What accounting policy should be adopted for the following expenditures? 1. Acquisition of new music rights from the estate of a deceased artist 2. Advertising costs intended to create customer loyalty. 3. Purchase of online customer lists from Amazon.com 4. Marketing costs to promote the new music library. 5. Computer programmer costs to fully convert the new music library to a digital format Betterment versus Maintenance Expenditures. During the year, Glens Falls, Inc. made the follow expenditures relating to plant, machinery, and equipment: Completed regularly scheduled repairs at a cost of $240,000. Overhauled several stamping machines at a cost of $400,000 to improve production efficiency. Replaced a broken cooling pump on a 100-ton press at a cost of $20,000 Required Identify which expenditures should be expensed as a maintenance expense or capitalized as a bet outlay. Depletion Expense. During the year, Tulsa Oil Corporation paid $50 million for a partial interest in dinn oil field with proven reserves. The company's share of the future production was capped at ten barrels. . . . 7.29 Required 1. Assuming that the oil field attains its expected future output, calculate Tulsa's depletion charge 2. If in the following year, Tulsa's share of the field's total production amounts to 2.25 million ba is the firm's depletion expense for that following year! finto the following Internet website www.irs.goy and locate Publication 535 "Business Expo antion to determine how oil and