- Please Answer These Questions And Their Entirety In The Format They A Displayed Below Clearly So That I Can Understand 1 (157.23 KiB) Viewed 55 times
Current assets: Calvin, Inc. Excerpts from Balance Sheet (in millions) Assets Total current assets Property, plant, and equipment: Property, plant, and equipment (at cost) 0 0
Property, plant, and equipment (at cost) Property, plant, and equipment (net) Other Assets: Total other assets Total Assets 0 0 0 0
! Required information E8-3 (Algo) Computing and Recording Cost and Depreciation of Assets (Straight-Line Depreciation) LO8- 2, 8-3 [The following information applies to the questions displayed below.] Shahia Company bought a building for $78,000 cash and the land on which it was located for $118,000 cash. The company paid transfer costs of $20,000 ($3,000 for the building and $17,000 for the land). Renovation costs on the building before it could be used were $27,000. E8-3 Part 1 Required: 1. Prepare the journal entry to record the purchase of the property, including all relevant expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet A Record the purchase of property, including all expenditures, paid with cash. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal
! Required information E8-3 (Algo) Computing and Recording Cost and Depreciation of Assets (Straight-Line Depreciation) LO8- 2, 8-3 [The following information applies to the questions displayed below.] Shahia Company bought a building for $78,000 cash and the land on which it was located for $118,000 cash. The company paid transfer costs of $20,000 ($3,000 for the building and $17,000 for the land). Renovation costs on the building before it could be used were $27,000. E8-3 Part 2 2. Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $19,000 estimated residual value. Straight-line depreciation
Required information E8-3 (Algo) Computing and Recording Cost and Depreciation of Assets (Straight-Line Depreciation) LO8- 2, 8-3 [The following information applies to the questions displayed below.] Shahia Company bought a building for $78,000 cash and the land on which it was located for $118,000 cash. The company paid transfer costs of $20,000 ($3,000 for the building and $17,000 for the land). Renovation costs on the building before it could be used were $27,000. E8-3 Part 3 3. What would be the net book value of the property (land and building) at the end of year 2? (Amounts to be deducted should be indicated by a minus sign.) Net book value of property at end of Year 2 Net book value
Required information E8-4 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight- Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.] During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $21,000. On the date of delivery, January 2, the company paid $5,000 on the machine, with the balance on credit at 9 percent interest due in six months. On January 3, it paid $1,200 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,800. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $3,200.
E8-4 Part 1 Required: 1. Indicate the effects of each transaction on the accounting equation. (Enter decreases to account categories as negative amounts. If the transaction does not impact the accounting equation choose "No effect" in the first column under "Assets".) Date Assets Liabilities Stockholders' Equity January 1 January 2 January 3 January 5 July 1
! Required information E8-4 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight- Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.] During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $21,000. On the date of delivery, January 2, the company paid $5,000 on the machine, with the balance on credit at 9 percent interest due in six months. On January 3, it paid $1,200 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,800. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $3,200.
E8-4 Part 2 2. Compute the acquisition cost of the machine. Acquisition Cost of the Machine Acquisition cost
Required information E8-4 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight- Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.] During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $21,000. On the date of delivery, January 2, the company paid $5,000 on the machine, with the balance on credit at 9 percent interest due in six months. On January 3, it paid $1,200 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,800. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $3,200. E8-4 Part 3 3. Compute the depreciation expense to be reported for Year 1. Depreciation expense
Required information E8-4 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight- Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.] During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $21,000. On the date of delivery, January 2, the company paid $5,000 on the machine, with the balance on credit at 9 percent interest due in six months. On January 3, it paid $1,200 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,800. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $3,200. E8-4 Part 5 5. What would be the net book value of the machine at the end of Year 2? (Amounts to be deducted should be indicated by a minus sign.) Net book value of machine at end of Year 2 Net book value at end of year 2
M8-9 (Algo) Computing Goodwill and Patents LO8-6 Elizabeth Pie Company has been in business for 50 years and has developed a large group of loyal restaurant customers. Giant Bakery Inc. has made an offer to buy Elizabeth Pie Company for $4,500,000. The book value of Elizabeth Pie's recorded assets and liabilities on the date of the offer is $3,450,000 with a fair value of $3,900,000. Elizabeth Pie also (1) holds a patent for a pie crust fluting machine that the company invented (the patent with a fair value of $380,000 was never recorded by Elizabeth Pie because it was developed internally) and (2) estimates goodwill from loyal customers to be $328,000 (also never recorded by the company). If Elizabeth Pie Company management accepts Giant Bakery's offer of $4,500,000, compute the amount of goodwill that Giant Bakery should record on the date of the purchase. Goodwill