ACC 557 Homework 3: Chapters 9 and
10
Follow Below Link to Download Tutorial
Due Week 6 and worth 70 points
Directions: Answer the following
questions on a separate Microsoft Word or Excel document. Explain how you
reached the answer or show your work if a mathematical calculation is needed,
or both. Submit your assignment using the assignment link in Blackboard.
Exercises
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.
June 30
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, 2014.)
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
- Prepare the journal entry to record depletion expense.
- 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?
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
- (1) Prepare the journal entry to record the issuance of the bonds.
(2) Compute the total cost of
borrowing for these bonds.
- 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.
Problems
P9-7A.The intangible assets section of Sappelt Company at December
31, 2015, is presented below.
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.
Instructions
- Prepare journal entries to record the transactions above.
- Prepare journal entries to record the 2016 amortization expense.
- Prepare the intangible assets section of the balance sheet at December 31, 2016.
P10-1A.On January 1, 2015, the ledger of Accardo Company contains
the following liability accounts.
Accounts Payable
$52,000
Sales Taxes
Payable
7,700
Unearned Service Revenue
16,000
During January, the following
selected transactions occurred.
Jan.
5 Sold merchandise for
cash totaling $20,520, which includes 8% sales taxes.
12Performed services for customers
who had made advance payments of $10,000. (Credit Service Revenue.)
14Paid state revenue department for
sales taxes collected in December 2014 ($7,700).
20Sold 900 units of a new product on
credit at $50 per unit, plus 8% sales tax.
21Borrowed $27,000 from Girard Bank
on a 3-month, 8%, $27,000 note.
25Sold merchandise for cash totaling
$12,420, which includes 8% sales taxes.
Instructions
- Journalize the January transactions.
- Journalize the adjusting entry at January 31 for the outstanding note payable. (Hint: Use one-third of a month for the Girard Bank note.)
- Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in accounts payable.
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