Reference no: EM132246555

Questions -

Q1. Sandhill Corporation traded a used truck (cost $22,000, accumulated depreciation $19,800) for a small computer with a fair value of $3,630. Sandhill also paid $550 in the transaction.

Prepare the journal entry to record the exchange. (The exchange has commercial substance.)

Q2. The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses.

(a) Money borrowed to pay building contractor (signed a note) $(294,000)

(b) Payment for construction from note proceeds 294,000

(c) Cost of land fill and clearing 10,230

(d) Delinquent real estate taxes on property assumed by purchaser 7,990

(e) Premium on 6-month insurance policy during construction 11,280

(f) Refund of 1-month insurance premium because construction completed early (1,880)

(g) Architect's fee on building 26,210

(h) Cost of real estate purchased as a plant site (land $201,800 and building $54,800) 256,600

(i) Commission fee paid to real estate agency 8,660

(j) Installation of fences around property 3,810

(k) Cost of razing and removing building 11,840

(l) Proceeds from salvage of demolished building (4,730)

(m) Interest paid during construction on money borrowed for construction 14,230

(n) Cost of parking lots and driveways 18,650

(o) Cost of trees and shrubbery planted (permanent in nature) 14,920

(p) Excavation costs for new building 2,880

Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be reported in parentheses.

Q3. Culver Company purchased machinery for $174,300 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, salvage value of $14,700, production of 88,800 units, and working hours of 39,200. During 2017, the company uses the machinery for 16,856 hours, and the machinery produces 24,864 units. Compute depreciation under the straight-line, units-of-output, working hours, sum-of-the-years'-digits, and double-declining-balance methods.