The Shaolin Clothing Company owned a couple of PPE assets purchased in the previous year and...
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The Shaolin Clothing Company owned a couple of PPE assets purchased in the previous year and during the year 2016, but the accounting records were destroyed by the flooding caused by the typhoon. The following transaction memos illustrates those missing data of the related PPE assets during the years: Apr. 1, 2013 Jun. 1, 2014 Shaolin purchased a new shelving for its store room. The shelving is expected to have a 20-year life and no residual value. Shaolin adopts the cost model as its accounting policy in subsequently measuring of this PPE. The cost of the shelving value $164,000, with freight charges $7,200, sales taxes $8,800, installation of shelving $30,000 and a cost of $6,000 to repair shelf damaged during the installation. Shaolin made all the payments in cash. Feb. 10, 2016 Office equipment costing $200,000 was given to a scrap dealer in town at no charge. At the date of disposal, accumulated depreciation on this office equipment amounted to $185,000. Shaolin purchased a passenger car for $120,000 plus 6% sales tax and $2,800 testing fee. Shaolin made the payment with a signed a 60-day 10% note. The passenger car expected to be used for 110,000 km and the salvage value is estimated to be $20,000 at the end of useful life. May 6, 2016 Shaolin sold an unused land together with a warehouse to Dumppool Property Limited for $9 million, receiving $1 million cash and a five-year, 8% note receivable for the remaining balance. Shaolin's record on these PPE showed the following: Land $1.1 million; Warehouse, $6.5 million. The accumulated depreciation of the warehouse at the date of disposal value $2.8 million. Oct. 8, 2016 Aug. 15, 2016 Shaolin traded in its old computer network as part of the purchase of a new network. The old network has cost $150,000, and its accumulated depreciation amounted to $120,000. The new network's list price was $100,000. Shaolin accepted a trade-in allowance of $10,000 for the old network, paying $20,000 down in cash and issuing a one-year, 8% note payable for the $70,000 balance owed. The new computer network is expected to have a 5-year life and salvage value of $2,000. Dec. 31, 2016 Dec. 31, 2016 Dec. 31, 2016 Dec. 31, 2016 Shaolin traded in an old delivery truck for a new one. The old truck cost $260,000, and its accumulated depreciation amounted to $180,000. The list price of the new truck was $390,000, but Shaolin received a $100,000 trade- in allowance for the old truck and paid $290,000 in cash. The new delivery truck is expected to have a 10-year life and salvage value of $20,000. Depreciation expense of the shelving, Shaolin adopted a 200 percent declining-balance. The actual km driven for the passenger car in year 2016 were 18,000 km. Depreciation on this PPE asset is computed on units-of-output method. Depreciation expense of the new computer network, Shaolin decided to adopt a straight-line method. Depreciation expense of the new delivery truck, Shaolin decided to adopt a straight-line method, and rounded up to the nearest whole month. You are asked to re-create the journal entries in general journal form accordingly. Date *2013 The Shaolin Clothing Company General Journal Jan. 1, 2013 Dec. 31, 2016 Account Title & Explanation Debit Credit 1 1 I 1 1 The Shaolin Clothing Company owned a couple of PPE assets purchased in the previous year and during the year 2016, but the accounting records were destroyed by the flooding caused by the typhoon. The following transaction memos illustrates those missing data of the related PPE assets during the years: Apr. 1, 2013 Jun. 1, 2014 Shaolin purchased a new shelving for its store room. The shelving is expected to have a 20-year life and no residual value. Shaolin adopts the cost model as its accounting policy in subsequently measuring of this PPE. The cost of the shelving value $164,000, with freight charges $7,200, sales taxes $8,800, installation of shelving $30,000 and a cost of $6,000 to repair shelf damaged during the installation. Shaolin made all the payments in cash. Feb. 10, 2016 Office equipment costing $200,000 was given to a scrap dealer in town at no charge. At the date of disposal, accumulated depreciation on this office equipment amounted to $185,000. Shaolin purchased a passenger car for $120,000 plus 6% sales tax and $2,800 testing fee. Shaolin made the payment with a signed a 60-day 10% note. The passenger car expected to be used for 110,000 km and the salvage value is estimated to be $20,000 at the end of useful life. May 6, 2016 Shaolin sold an unused land together with a warehouse to Dumppool Property Limited for $9 million, receiving $1 million cash and a five-year, 8% note receivable for the remaining balance. Shaolin's record on these PPE showed the following: Land $1.1 million; Warehouse, $6.5 million. The accumulated depreciation of the warehouse at the date of disposal value $2.8 million. Oct. 8, 2016 Aug. 15, 2016 Shaolin traded in its old computer network as part of the purchase of a new network. The old network has cost $150,000, and its accumulated depreciation amounted to $120,000. The new network's list price was $100,000. Shaolin accepted a trade-in allowance of $10,000 for the old network, paying $20,000 down in cash and issuing a one-year, 8% note payable for the $70,000 balance owed. The new computer network is expected to have a 5-year life and salvage value of $2,000. Dec. 31, 2016 Dec. 31, 2016 Dec. 31, 2016 Dec. 31, 2016 Shaolin traded in an old delivery truck for a new one. The old truck cost $260,000, and its accumulated depreciation amounted to $180,000. The list price of the new truck was $390,000, but Shaolin received a $100,000 trade- in allowance for the old truck and paid $290,000 in cash. The new delivery truck is expected to have a 10-year life and salvage value of $20,000. Depreciation expense of the shelving, Shaolin adopted a 200 percent declining-balance. The actual km driven for the passenger car in year 2016 were 18,000 km. Depreciation on this PPE asset is computed on units-of-output method. Depreciation expense of the new computer network, Shaolin decided to adopt a straight-line method. Depreciation expense of the new delivery truck, Shaolin decided to adopt a straight-line method, and rounded up to the nearest whole month. You are asked to re-create the journal entries in general journal form accordingly. Date *2013 The Shaolin Clothing Company General Journal Jan. 1, 2013 Dec. 31, 2016 Account Title & Explanation Debit Credit 1 1 I 1 1
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Financial and Managerial Accounting
ISBN: 978-1285866307
13th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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