Financial Accounting
chasfl
chapter_8_worksheet_fin_acct.docxName:
Quick Study 8-13 (10 minutes) Don’t forget to use averaged accounts receivable.
Total asset turnover = = 0.80 times
($ 000s)
Interpretation:
Exercise 8-23 (15 minutes)
1. Book value of the old tractor
2. Loss on the exchange
Book value - Trade-in allowance
3. Debit to new Tractor account
Cash paid + Trade-in allowance
Alternatively, answers can be taken from the following journal entry:
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Tractor (new) |
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Loss on Exchange of Assets |
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Accumulated Depreciation–Tractor |
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Tractor (old) |
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Cash |
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To record asset exchange. |
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Problem 8-1A (50 minutes)
Part 1
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Appraised Value |
Percent of Total |
Apportioned Cost |
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Building |
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Land |
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Land improvements |
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Vehicles |
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Total |
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2011
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Jan. 1 |
Building |
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Land |
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Land Improvements |
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Vehicles |
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Cash |
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To record asset purchases. |
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Part 2
Compute Year 2011 straight-line depreciation on building
Part 3
Computer Year 2011 double-declining-balance depreciation on land improvements
Part 4
Problem 8-6A (20 minutes) Don’t forget journal entry descriptions and include calculations where appropriate.
1.
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Jan. 2 |
Machinery |
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Cash |
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Jan. 3 |
Machinery |
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Cash |
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Jan. 3 |
Machinery |
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Cash |
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2. a. First year
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Dec. 31 |
Depreciation Expense—Machinery |
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Accumulated Depreciation—Machinery |
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b. Fifth year
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Dec. 31 |
Depreciation Expense—Machinery |
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Accumulated Depreciation—Machinery |
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3. Accumulated depreciation at the date of disposal
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Five years' depreciation |
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Book value at the date of disposal
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Original total cost |
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Accumulated depreciation |
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Book value |
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(a) Sold for $13,500 cash
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Dec. 31 |
Cash |
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Loss on Sale of Machinery |
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Accumulated Depreciation—Machinery |
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Machinery |
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(b) Sold for $45,000 cash
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Dec. 31 |
Cash |
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Accumulated Depreciation—Machinery |
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Machinery |
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Gain on Sale of Machinery |
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(c) Destroyed in fire and collected $24,000 cash from insurance company
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Dec. 31 |
Cash |
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Accumulated Depreciation—Machinery |
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Loss from Fire |
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Machinery |
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Problem 8-8A (20 minutes) Don’t forget to include descriptions and calculations where appropriate.
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2011 |
(a) |
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June 25 |
Leasehold |
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Cash |
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(b) |
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July 1 |
Prepaid Rent |
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Cash |
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(c) |
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July 5 |
Leasehold Improvements |
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Cash |
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2. |
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2011 |
(a) |
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Dec. 31 |
Rent Expense |
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Accumulated Amortization—Leasehold |
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(b) |
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Dec. 31 |
Amortization Expense—Leasehold Improvements |
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Accumulated Amortization—Leasehold Improvements |
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(c) |
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Dec. 31 |
Rent Expense |
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Prepaid Rent |
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Ethics Challenge — BTN 8-3
1.
2.
3.
