Determine the cost of plant acquisitions

Assignment Help Accounting Basics

Reference no: EM13903952

(a) Explain the application of the cost principle in determining the acquisition of plant assets

(b) List the numbers of the foregoing transactions, and opposite each indicate the account title to which each expenditure should be debited

1. Paid $5000 of accrued taxes at time plant site was acquired

2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit

3. Paid $850 sales taxes on new delivery truck

4. Paid $17500 for parking lots and driveways on new plant site

5. Paid $250 to have company name and advertising slogan painted on new delivery truck

6. Paid $8000 for installation of new factory machinery

7. Paid $900 for one-year accident insurance policy on new delivery truck

8. Paid $75 motor vehicle license fee on new truck

Compute depreciation using different methods

Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8years. Actual miles driven were 15,000 in 2011 and 12,000 in 2012.

(a) Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method.

(b) Assume that Brainiac uses the straight-line method.

(1)Prepare the journal entry to record 2011 depreciation.

(2)Show how the truck would be reported in the December 31, 2011, balance sheet.

Prepare adjusting entries for amortization

The following are selected 2011 transactions of Franco Corporation

Jan. 1 Purchased a small company and recorded goodwill of $150,000.Its useful life is indefinite.

May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years and a legal life of 20 years

Prepare necessary adjusting entries at December 31 to record amortization required by the events above.

Reference no: EM13903952

Questions Cloud

Prepare the business income statement and changes in equity : Prepare the business Income Statement for the period. Prepare the Statement of Changes in Equity for the period. Prepare the classified Balance Sheet at the end of the period.

A lease amortization table to be used by the lessor and less : Assuming a present value of 4.545455 where applicable, prepare for the lessor and lessee: Journal entries for year 2013 and 2014. A lease amortization table to be used by the lessor and lessee for 2013 & 2014. Balance Sheet presentation for 2013 f..

Calculate the ddb depreciation recorded. : Prepare the entries necessary to correct the books for the truck transaction assuming straight-line depreciation should be used and the books have been closed for 2013. Calculate the DDB depreciation recorded in 2013 for the cement plant.

Briefly explain the term post investment holdup : Briefly explain the term post investment holdup. Give an example. How can this problem be solved (Give any one brief solution)

Determine the cost of plant acquisitions : Determine the cost of plant acquisitions Compute depreciation using different methods Prepare adjusting entries for amortization

Journalise the events : You are to journalise the events (including dates and notations). You should assume that all monies were received on 18th April (applications). What other option did the directors have with the excess demand, returning the excess?

Write a report to the owners detailing : Giving consideration to the various options, you have been requested to advise the owners of Johnsons what the various options are, outlining the positives and negatives of each. Required: write a report (should be extensive) to the owners detailing..

Fundamentals of chemical bonding and ionic equilibrium : Aim To understand the fundamentals of chemical bonding and ionic equilibrium and its application in engineering problems.

Identify the factors that modify toxicity : Identify the factors that modify toxicity

User Account

All Pages