ACC291 E8-5 E9-2 E9-7 E9-12 - E8-5 At December 31, 2010, Braddock Company had a balance of $15,000 in the Allowance for Doubtful Accounts.

ACC291 E8-5 E9-2 E9-7 E9-12

E8-5 At December 31, 2010, Braddock Company had a balance of $15,000 in the Allowance for Doubtful Accounts. During 2011, Braddock wrote off accounts totaling $13,000. One of those ccounts ($1,800) was later collected.At December 31, 2011, an aging schedule indicated that the balance in the Allowance for Doubtful Accounts should be $19,000.

Instructions

Prepare journal entries to record the 2011 transactions of Braddock Company.

E9-2 Trudy Company incurred the following costs.

1. Sales tax on factory machinery purchased $ 5,000

2. Painting of and lettering on truck immediately upon purchase 700

3. Installation and testing of factory machinery 2,000

4. Real estate broker’s commission on land purchased 3,500

5. Insurance premium paid for first year’s insurance on new truck 880

6. Cost of landscaping on property purchased 7,200

7. Cost of paving parking lot for new building constructed 17,900

8. Cost of clearing, draining, and filling land 13,300

9. Architect’s fees on self-constructed building 10,000

 

Instructions

Indicate to which account Trudy would debit each of the costs.

Transaction
1. Sales tax on factory machinery purchased $5,000
2. Painting of and lettering on truck immediately upon purchase 700
3. Installation and testing of factory machinery 2,000
4. Real estate broker’s commission on land purchased 3,500
5. Insurance premium paid for first year’s insurance on new truck 880
6. Cost of landscaping on property purchased 7,200
7. Cost of paving parking lot for new building constructed 17,900
8. Cost of clearing, draining, and filling land 13,300
9. Architect’s fees on self-constructed building 10,000

E9-7 Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011.The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years.Actual miles driven were 15,000 in 2011 and 12,000 in 2012.

Instructions
(a) Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method.

(b) Assume that Brainiac uses the straight-line method.

(1) Prepare the journal entry to record 2011 depreciation.
(2) Show how the truck would be reported in the December 31, 2011, balance sheet.

E9-12 The following are selected 2011 transactions of Franco Corporation. Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.

May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.

Instructions

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

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