Reference no: EM132696522
Question - Create Journal entries involving tangible and intangible assets. Present journal entries for each of the following transactions of Moon Macro-systems:
a. Acquired computers costing $400,000 and computer software costing $40,000 on January 1, 2011. Moon expects the computers to have a service life of 10 years and $40,000 salvage value. It expects the computer software to have a service life of four years and zero salvage value.
b. Paid $20,000 to install the computers in the office. Paid $10,000 to install and test the computer software.
c. Recorded depreciation and amortization using the straight-line method for 2011 and 2012. Moon records a full year of depreciation in the year of acquisition. Treat depreciation and amortization as a period expense.
d. On January 1, 2013, new software offered on the market made the software acquired in part a completely obsolete. Give any required journal entry.
e. On January 2, 2013, Moon revised the depreciable life of the computers to a total of 14 years and the salvage value to $56,000. Give the entry to record depreciation for 2013.
f. On December 31, 2014, Moon sold the computers for $260,000. Give the required journal entries for 2014.