Hotel ICE (Hotel) purchased an electric-powered mini bus (e-bus) in 2021, the e-bus would be used...

    

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Hotel ICE (Hotel) purchased an electric-powered mini bus (e-bus) in 2021, the e-bus would be used as a hotel shuttle bus commuting between the hotel and Western Kowloon Railway Station area. The hotel had the following transactions in January: a) On 1 January 2021, Hotel signed a purchase agreement with Smith Motor for HKS1,500,000 for an e-bus, HK$50,000 for repainting the e-bus into green color, HK$200,000 for an additional air-conditioner at the passenger area of the e-bus. On 1 January 2021, Hotel appointed a graphic designer for $5,000 to redesign the hotel's brochures to include this new e-bus. Hotel paid 50% deposit in cash on the same day and the graphic designer will deliver his designs in mid-February. b) c) On 1 January 2021, Hotel paid $2,400 for the vehicle license of the e-bus covering the period of 1 January 2021 to 31 December 2021 by cash. On 15 January, 2021, the e-bus was delivered to the Hotel and it was tested and confirmed by the Hotel in good condition. The Hotel accepted the e-bus and paid Smith by cash on the same day. d) e) On 16 January, 2021, to further improve the riding comfort of the hotel guests, Hotel decided to replace all 4 standard tires of the e-bus with an upgraded version of tires. The 4 new upgraded tires were installed into the e-bus on the same day by Smith and the cost of replacement is $12,000, hotel will pay Smith when receipt of invoice next month. On 25 January, 2021, Hotel noticed some problems with the e-bus' battery, however, the battery is not covered under any warranty. At the end, Hotel purchased the same model of replacement battery from Smith for $450,000. The battery was installed into the e-bus on the same day, and the Hotel received the invoice from Smith on 1 February f) 2021. Required: Prepare journal entries for the above transactions a) to f). (you are not required to prepare depreciation entries). (3 points each) Write down your answers on the answer sheet. Hotel ICE (Hotel) purchased an electric-powered mini bus (e-bus) in 2021, the e-bus would be used as a hotel shuttle bus commuting between the hotel and Western Kowloon Railway Station area. The hotel had the following transactions in January: a) On 1 January 2021, Hotel signed a purchase agreement with Smith Motor for HKS1,500,000 for an e-bus, HK$50,000 for repainting the e-bus into green color, HK$200,000 for an additional air-conditioner at the passenger area of the e-bus. On 1 January 2021, Hotel appointed a graphic designer for $5,000 to redesign the hotel's brochures to include this new e-bus. Hotel paid 50% deposit in cash on the same day and the graphic designer will deliver his designs in mid-February. b) c) On 1 January 2021, Hotel paid $2,400 for the vehicle license of the e-bus covering the period of 1 January 2021 to 31 December 2021 by cash. On 15 January, 2021, the e-bus was delivered to the Hotel and it was tested and confirmed by the Hotel in good condition. The Hotel accepted the e-bus and paid Smith by cash on the same day. d) e) On 16 January, 2021, to further improve the riding comfort of the hotel guests, Hotel decided to replace all 4 standard tires of the e-bus with an upgraded version of tires. The 4 new upgraded tires were installed into the e-bus on the same day by Smith and the cost of replacement is $12,000, hotel will pay Smith when receipt of invoice next month. On 25 January, 2021, Hotel noticed some problems with the e-bus' battery, however, the battery is not covered under any warranty. At the end, Hotel purchased the same model of replacement battery from Smith for $450,000. The battery was installed into the e-bus on the same day, and the Hotel received the invoice from Smith on 1 February f) 2021. Required: Prepare journal entries for the above transactions a) to f). (you are not required to prepare depreciation entries). (3 points each) Write down your answers on the answer sheet.

Answer rating: 100% (QA)

Answer Date ccount Dr Cr 20210101 Cost of Purchase 1750000 Smith Motors 1750000 Date cco... View the full answer