accounting homework

1. Presented below are selected transactions forSurface Company during 2015.

Jan. 1st Retireda piece of machinery originally purchased on January 1st, 2005. The machine cost $62,000 on that date. Surface estimated a useful life of 10 years with no salvage value.

June 30th Sold a computer purchased on January 1st, 2012. The computer cost $45,000. Surface Co. estimated a useful life of 5 years with no salvage value. The computer sold for $14,000.

Dec. 31st Discarded a delivery truck purchased on January 1st, 2011. The truck cost $33,000. It was depreciated based on a 6-year useful life with an estimated $3,000 salvage value.

Directions

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on the disposed assets. Surface Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31st, 2014.)

2. Freelance Company owns equipment that cost $65,000 when purchased on January 1st, 2012. The equipmentwas depreciated using the straight-line method based with an estimated salvage value of $5,000 and an estimated useful life of 5 years.

Directions

Prepare Freelance Company’s journal entries to record the sale of the equipment using the following separate situations:

(a) Sold the equipment for $31,000 on January 1st, 2015.

(b) Sold the equipment for $31,000 on May 1st, 2015.

(c) Sold the equipment for $11,000 on January 1st, 2015.

(d) Sold the equipment for $11,000 on October 1st, 2015.

3. On July 1st, 2015, Scramblers Inc. invested $720,000 in a mine estimated to have 900,000 tons of ore with a uniform grade. During the last 6 months of 2015, 100,000 tons of ore were mined and sold.

Directions

(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?

4. Selected transactions ofHandiman Corporation during 2015 follow.

Jan. 1st Purchased a small company and recorded goodwill of $150,000. Its useful life is considered indefinite.

May 1st Purchasedfor $75,000 a patent with an estimated useful life of 5 years but a legal life of 20 years.

Directions

Prepare necessary adjusting entries at December 31st to record any amortization expense required by the above events.

5. Cobb’s Delivery Company and Fetch Express Delivery exchanged delivery trucks on January 1st, 2015. Cobb’s truck cost $22,000. It has accumulated depreciation of $15,000 and a fair value of $3,000. Fetch’s truck cost $10,000. It has accumulated depreciation of $8,000 and a fair value of $3,000. The transaction has commercial substance.

Directions

(a) Journalize the exchange for Cobb’s Delivery Company.

(b) Journalize the exchange for Fetch Express Delivery.