Iowa Trucking Company entered into each of the following transactions during 2019. They use straight- line...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Iowa Trucking Company entered into each of the following transactions during 2019. They use straight- line depreciation on buildings and fixtures and the 150% declining balance method on equipment. Intangible assets are amortized over 15 years. Round all answers to the nearest dollar. A. On January 1, Iowa Trucking paid $20,000 for a used semi lift. The lift has a ten-year useful life and a $5,000 estimated residual value. B. On April 1, Iowa Trucking acquired a used semi-truck sleeper complete with furnishings in exchange for a $96,000, 6% note payable due April 1, 2023. Interest is payable quarterly beginning on July 1, 2019. The truck had a fair value of $115,000, and the furnishings a fair value of $5,000. The truck has a useful life of eight years with a residual value of $20,000. The furnishings have a useful life of six years and a $750 residual value. C. On September 1, Iowa Trucking Company spent $30,000 for a quarter acre lot. They spent an additional $12,000 putting up a building on that lot. The building has a useful life of 20 years. D. On January 1, Iowa Trucking paid S20,000 to recondition a semi-truck originally purchased for $95,000 on 1/1/17. The semi-truck had an estimated useful life of 10 years and had a residual value of $20,000. The reconditioning will extend the life by two years. E. Sold a trailer on 6/30/19 for $1,000. The trailer was purchased on 1/1/13 for $40,000. It had an eight-year useful life and a $3,000 residual value. F. On January 1, Iowa Trucking paid S4,500 for the customer list of a small competitor recently bankrupted. Required: 1) Prepare the journal entries to record each transaction. 2) Prepare any adjusting journal entries necessary at 12/31/19. 3) Show what would be reported on the 2019 income statement related to the above transactions. 4) Prepare the operating, investing and financing sections of the statement of cash flow for 2019. Show what would have been reported for each transaction. The operating section should be prepared under both the direct and indirect methods. Iowa Trucking Company entered into each of the following transactions during 2019. They use straight- line depreciation on buildings and fixtures and the 150% declining balance method on equipment. Intangible assets are amortized over 15 years. Round all answers to the nearest dollar. A. On January 1, Iowa Trucking paid $20,000 for a used semi lift. The lift has a ten-year useful life and a $5,000 estimated residual value. B. On April 1, Iowa Trucking acquired a used semi-truck sleeper complete with furnishings in exchange for a $96,000, 6% note payable due April 1, 2023. Interest is payable quarterly beginning on July 1, 2019. The truck had a fair value of $115,000, and the furnishings a fair value of $5,000. The truck has a useful life of eight years with a residual value of $20,000. The furnishings have a useful life of six years and a $750 residual value. C. On September 1, Iowa Trucking Company spent $30,000 for a quarter acre lot. They spent an additional $12,000 putting up a building on that lot. The building has a useful life of 20 years. D. On January 1, Iowa Trucking paid S20,000 to recondition a semi-truck originally purchased for $95,000 on 1/1/17. The semi-truck had an estimated useful life of 10 years and had a residual value of $20,000. The reconditioning will extend the life by two years. E. Sold a trailer on 6/30/19 for $1,000. The trailer was purchased on 1/1/13 for $40,000. It had an eight-year useful life and a $3,000 residual value. F. On January 1, Iowa Trucking paid S4,500 for the customer list of a small competitor recently bankrupted. Required: 1) Prepare the journal entries to record each transaction. 2) Prepare any adjusting journal entries necessary at 12/31/19. 3) Show what would be reported on the 2019 income statement related to the above transactions. 4) Prepare the operating, investing and financing sections of the statement of cash flow for 2019. Show what would have been reported for each transaction. The operating section should be prepared under both the direct and indirect methods.
Expert Answer:
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
Students also viewed these accounting questions
-
Note how each of the following transactions affects (a) Net assets invested in capital assets, net of related debt, (b) Restricted net assets, and (c) Unrestricted net assets. (Record N/A if there is...
-
The Totman Company has the following transactions during the months of January and February: The cost of the inventory at January 1 is $24, $23, and $15 per unit, respectively, under the FIFO,...
-
A company had the following transactions during its most recent fiscal period: 1. A total of 5,000 shares were issued at $30 per share. 2. Equipment worth $120,000 was purchased for $80,000 cash and...
-
Tri-State Railroad Company organizes its three divisions, the Southeast (SE), East (E), and South (S) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance,...
-
Ruberstein, Inc. was founded on April 1 and entered into the following transactions: Apr. 1 Issued common stock to shareholders in exchange for cash, $20,000. 1 Purchased a delivery van (equipment),...
-
List the main factors that put upward pressure on prices in the Internet channel.
-
The chapter provides sample goals for an initial sales call on a prospect. (a) What other goals can you come up with that might be appropriate for an initial sales call? (b) Develop three or four...
-
Carleton Company has two service departments and two production departments. Information on annual manufacturing overhead costs and cost drivers follows: The company allocates service department...
-
Oslo Company prepared the following contribution format income statement based on a sales volume of 1 , 0 0 0 units ( the relevant range of production is 5 0 0 units to 1 , 5 0 0 units ) : Sales $ 2...
-
XYZ is a calendar-year corporation that began business on January 1, 2017. For 2017, it reported the following information in its current year audited income statement. Notes with important tax...
-
Answer the questions given in this case study and explain thoroughly. PEOPLE NetworkRail Managing change through training and development Introduction Britain relies on rail. The railway is a vital...
-
Calculate the amount of futures contracts you need to sell to hedge the interest-rate risk on your holdings of \($4\) million of T-bonds. Assume each contract currently sells for $125,000.
-
A new temperature scale in degree \(\mathrm{N}\) is desired with a freezing point at \(100^{\circ} \mathrm{N}\) and the boiling point at \(400^{\circ} \mathrm{N}\). Establish a correlation between...
-
Draw a neat sketch of the drill bit and explain all the terminology used for nomenclature.
-
A reversible heat engine operates between \(875 \mathrm{~K}\) and \(310 \mathrm{~K}\) and drives a reversible refrigerator operating between \(310 \mathrm{~K}\) and \(255 \mathrm{~K}\). The engine...
-
Discuss the working of plane grinding machine with a neat sketch.
-
he whole notion of a cost of capital is ultimately based around an investor's opportunity cost. Investors can move so freely between stocks and other asset classes now. Gold has a compounded return...
-
What are bounds and what do companies do with them?
-
Gire Company began operations at the beginning of 2007, at which time it purchased a depreciable asset for $60,000. For 2007 through 2010, the asset was depreciated on the straight-line basis over a...
-
Define the following: a. Account b. Contra account c. Ledger d. Journal e. Posting
-
What are the three characteristics of an asset and why does a deferred tax asset of a corporation meet these characteristics?
-
Suppose a species of bacteria divides once every 20 minutes. You start with a single bacterium on your unrefrigerated egg-and-baloney sandwich at 8:00 am. Show that when you sit down to lunch at...
-
The lightest and heaviest flying birds are the bee hummingbird of Cuba, which weighs about 1.6 grams, and the great bustard of Europe and Asia, which can weigh as much as 21 kilograms. Show that the...
-
What is a chemoautotroph? What does a chemoautotroph have in common with a plant? How does a chemoautotroph differ from a plant in how it obtains food?
Study smarter with the SolutionInn App