ACC291 Week 2 E8-3 BE9-13 Do
it!9-4 E9-9 E9-10 P9-5A
Exercise E8-3 (in Class)
Exercise BE9-13
Exercise Do It! 9-4
Exercise E9-9
Exercise E9-10
Problem P9-5A
E8-3 The ledger of Hixson Company at the end of the current year shows Accounts
Receivable $120,000, Sales $840,000, and Sales Returns and Allowances $30,000.
Instructions
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is uncollectible.
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is uncollectible.
(b) If Allowance for Doubtful
Accounts has a credit balance of $2,100 in the trial balance, journalize the
adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of
net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful
Accounts has a debit balance of $200 in the trial balance, journalize the
adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75%
of net sales and (2) 6% of accounts receivable.
BE9-13 Information
related to plant assets, natural resources, and intangibles at the end of 2011
for Spain Company is as follows: buildings $1,100,000; accumulated
depreciation—buildings $650,000; goodwill $410,000; coal mine $500,000;
accumulated depletion—coal mine $108,000.
Prepare
a partial balance sheet of Spain Company for these items.
Do it! 9-4 Match the statement with the term most directly associated with
it.
(a)
Goodwill (d)
Amortization
(b)
Intangible assets (e) Franchise
(c)
Research and development costs
1.
______ Rights, privileges, and competitive advantages that result from the
ownership of long lived assets that do not possess physical substance.
2.
______ The allocation of the cost of an intangible asset to expense in a
rational and systematic manner.
3.
______ A right to sell certain products or services, or use certain trademarks
or trade names within
a designated geographic area.
4.
______ Costs incurred by a company that often lead to patents or new products. These
costs must be expensed as incurred.
5.
______ The excess of the cost of a company over the fair market value of the
net assets acquired.
E9-9 Presented
below are selected transactions at Ingles Company for 2011.
Jan.
1 Retired a piece of machinery that was purchased on January 1, 2001.The
machine cost $62,000 on that date. It had a useful life of 10 years with no
salvage value.
June
30 Sold a computer that was purchased on January 1, 2008.The computer cost $40,000.
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, 2007. The truck
cost $39,000. 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. Ingles Company uses
straight-line depreciation. (Assume depreciation is up to date as of December
31, 2010.)
E9-10 Beka
Company owns equipment that cost $50,000 when purchased on January 1, 2008.
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.
Instructions
Prepare
Beka Company’s journal entries to record the sale of the equipment in these
four independent situations.
(a) Sold
for $28,000 on January 1, 2011.
(b) Sold
for $28,000 on May 1, 2011.
(c) Sold
for $11,000 on January 1, 2011.
(d) Sold
for $11,000 on October 1, 2011.
P9-5A At December 31, 2011,
Jimenez Company reported the following as plant assets.
and so on ...
and so on ...
At
December 31, 2011, Jimenez Company reported the following as plant assets.
Land $
4,000,000
Buildings
$28,500,000
Less:
Accumulated depreciation—buildings 12,100,000
16,400,000
Equipment
48,000,000
Less:
Accumulated depreciation—equipment 5,000,000
43,000,000
Total
plant assets $63,400,000
During
2012, the following selected cash transactions occurred.
April
1 Purchased land for $2,130,000.
May 1
Sold equipment that cost $780,000 when purchased on January 1, 2008. The
equipment was sold for $450,000.
June 1
Sold land purchased on June 1, 2002, for $1,500,000.The land cost $400,000.
July 1
Purchased equipment for $2,000,000.
Dec.
31 Retired equipment that cost $500,000 when purchased on December 31, 2002. No
salvage value was received.
Instructions
(a)
Journalize the above transactions. The company uses straight-line depreciation
for buildings and equipment. The buildings are estimated to have a 50-year life
and no salvage value. The equipment is estimated to have a 10-year useful life
and no salvage value. Update depreciation on assets disposed of at the time of
sale or retirement.
(b)
Record adjusting entries for depreciation for 2012. (c) Prepare the plant
assets section of Jimenez’s balance sheet at December 31, 2012.
SOLUTION PREVIEW
|
Jan. 1
|
Accumulated
Depreciation—Machinery
|
62,000
|
|
|
|
Machinery
|
|
62,000
|
|
|
|
|
|
|
June 30
|
Depreciation Expense
|
4,000
|
|
|
|
Accumulated Depreciation—
|
|
|
|
|
Computer ($40,000 X
1/5 X 6/12)
|
|
4,000
|
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