ACC 557 homework 3 chapter 9 and 10
11aug1975 (Not rated)
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| E9-9. Presented below are selected transactions at Ridge Company for 2015. |
| Jan. 1 Retired a piece of machinery that was purchased on January 1, 2005. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value |
| 6/30/2015 Sold a computer that was purchased on January 1, 2012. The computer cost $45,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000. |
| Dec. 31 Discarded a delivery truck that was purchased on January 1, 2011. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value. |
| Instructions |
| Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2015.) |
| E9-10 |
| Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2012. It has been depreciated using the straight-line method based on estimated salvage value of $5,000 and an estimated useful life of 5 years. |
| (a) Sold for $31,000 on January 1, 2015. |
| (b) Sold for $31,000 on May 1, 2015. |
| (c) Sold for $11,000 on January 1, 2015. |
| (d) Sold for $11,000 on October 1, 2015. |
| E9-11. On July 1, 2015, Friedman Inc. invested $720,000 in a mine estimated to have 900,000 tons of ore of uniform grade. During the last 6 months of 2015, 100,000 tons of ore were mined and sold. |
| Instructions |
| a) Prepare the journal entry to record depletion expense. |
| b) Assume that the 100,000 tons of ore were mined, but only 80,000 units were sold. How are the costs applicable to the 20,000 unsold units reported? |
| |
| The patent was acquired in January 2015 and has a useful life of 10 years. The franchise was acquired in January 2012 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2016. | |
| Jan. 2 Paid $27,000 legal costs to successfully defend the patent against infringement by another company. | |
| Jan.–June Developed a new product, incurring $140,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life. | |
| Sept. 1 Paid $50,000 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials will air in September and October. | |
| Oct. 1 Acquired a franchise for $140,000. The franchise has a useful life of 50 years. |
| E10-12. Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2015. The bonds pay interest twice a year. |
| Instructions |
| a) (1) Prepare the journal entry to record the issuance of the bonds. |
| (2) Compute the total cost of borrowing for these bonds. |
| b) Repeat the requirements from part (a), assuming the bonds were issued at 105. |
| E10-15. Jernigan Co. receives $300,000 when it issues a $300,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2015. The terms provide for semiannual installment payments of $25,000 on June 30 and December 31. | |
| Instructions | |
| Prepare the journal entries to record the mortgage loan and the first two installment payments. |
| P10-1A. On January 1, 2015, the ledger of Accardo Company contains the following liability accounts. |
| Accounts Payable |
| Sales Taxes Payable |
| Unearned Service Revenue |
| During January, the following selected transactions occurred. |
| Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes. |
| 12 Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.) |
| 14 Paid state revenue department for sales taxes collected in December 2014 ($7,700). |
| 20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. |
| 21 Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note. |
| 25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes. |
| Instructions |
| a) Journalize the January transactions. |
| b) Journalize the adjusting entry at January 31 for the outstanding note payable. (Hint: Use one-third of a month for the Girard Bank note.) |
| c) Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in accounts payable. |
11 years ago
Acc 557 homework 3 chapter 9 and 10
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