Cam is keen to expand their business to allow photographers in regional areas access to their...

Transcribed Image Text:

Cam is keen to expand their business to allow photographers in regional areas access to their products and expertise. An old photography store is up for sale that Cam has had independently valued and provided you with the following information about the assets and liabilities avaible to acquire. Land Building Furniture and Fittings Photography Equipment Accounts Payable Mortgage Loan $230,000 $127,000 $ 62,000 $ 86,000 $ 11,000 $150,000 Cam has paid $375,000 to purchase the store along with associated assets and will take on the all the liabilities currently associated with the property. In setting up the new store Cam has decided to trade in some of their existing equipment and upgrade to the new deluxe models. The old equipment Cam is trading in was purchased on 1 October, 2021 at cost of $32,000 it was assumed they would last approximately 6 years and have a residual value of $3,000. Shutter Speed uses the reducing balance method to depreciate all its equipment at a rate of 25% per year. The trade in took place on 5 September, 2023 and Cam will pay $25,000 cash in order to acquire the new equipment that have a cost of $47,000. In addition to the new photography equipment Cam has also decided to purchase a new entertainment system to create a recreation room for their employees at the existing business location. The purchase of the system includes a number of components including, a large screen OLED TV - cost $9,000, a set of satellite speakers required to hear the TV - cost $1,540, installation and setup charges of $630, a 5-year extended warranty plan - cost $360, and a laptop computer that can be plugged into the system but is not required for it to operate - cost $1,370. Date QUESTION 6 - 13 marks Using the relevant information from page 10 of the Information Booklet REQUIRED: A. Record the Journal entries for the acquisition of the old photography store business that took place on August 1 and for the trade in of the old equipment that occurred on September 5. Question 6 Part A (Enter answers here) Details Dr Cr Cam is keen to expand their business to allow photographers in regional areas access to their products and expertise. An old photography store is up for sale that Cam has had independently valued and provided you with the following information about the assets and liabilities avaible to acquire. Land Building Furniture and Fittings Photography Equipment Accounts Payable Mortgage Loan $230,000 $127,000 $ 62,000 $ 86,000 $ 11,000 $150,000 Cam has paid $375,000 to purchase the store along with associated assets and will take on the all the liabilities currently associated with the property. In setting up the new store Cam has decided to trade in some of their existing equipment and upgrade to the new deluxe models. The old equipment Cam is trading in was purchased on 1 October, 2021 at cost of $32,000 it was assumed they would last approximately 6 years and have a residual value of $3,000. Shutter Speed uses the reducing balance method to depreciate all its equipment at a rate of 25% per year. The trade in took place on 5 September, 2023 and Cam will pay $25,000 cash in order to acquire the new equipment that have a cost of $47,000. In addition to the new photography equipment Cam has also decided to purchase a new entertainment system to create a recreation room for their employees at the existing business location. The purchase of the system includes a number of components including, a large screen OLED TV - cost $9,000, a set of satellite speakers required to hear the TV - cost $1,540, installation and setup charges of $630, a 5-year extended warranty plan - cost $360, and a laptop computer that can be plugged into the system but is not required for it to operate - cost $1,370. Date QUESTION 6 - 13 marks Using the relevant information from page 10 of the Information Booklet REQUIRED: A. Record the Journal entries for the acquisition of the old photography store business that took place on August 1 and for the trade in of the old equipment that occurred on September 5. Question 6 Part A (Enter answers here) Details Dr Cr

Answer rating: 100% (QA)

Journal Entries A Acquisition of Old Photography Store August 1 Date Account Debit Dr Credit Cr 0108... View the full answer