Reference no: EM131690974

Question 1 - On January 1, 2016, Alpha Company purchased equipment for $15,000 with an estimated 10-year life and no salvage value. It was determined that the straight-line method of depreciation would be used. Alpha has a December 31 fiscal year end. During 2020, Alpha determined that the useful life for this equipment should be only 7 years. Using this information, how much is: (Enter only whole dollar values.)

1. the 2020 depreciation expense

2. the accumulate depreciation after the fiscal year 2020 adjusting entry

3. the book value of the truck after the fiscal year 2020 adjusting entry

Question 2 -  On July 1, 2016, Alpha Company negotiated the purchase of a new piece of equipment with the seller Zulu Company. The equipment was list for $200,000. Smooth talking Alpha was able to negotiate the purchase price and acquired the equipment at $175,000. Alpha Company completed the purchase transaction on July 1. Additionally, Alpha was entitled to a 1% discount if it paid for the equipment within 10 days. After completing the purchase, Bravo Company, third party, offered Alpha, $185,000 for this equipment. What amount should Alpha Company record the equipment purchase at if payment is made by July 11?

Question 3 - On June 30, 2016, after adjusting entries were posted, Alpha Company sold a machine. The historical cost was $9,000 and the book value was $2,000. It was sold for $1,100 cash. Using this information, how much should be recorded on June 30 for the following accounts:

1. Accumulated Depreciation, Machine

2. Gain or (Loss) on Sale (Enter any loss amount with $ sign inside of brackets)

3. Machine

Question 4 -  On July 1, 2016, Alpha Company exchanged an old computer (Equipment) with a historical cost of $2,500 that had accumulated depreciation of $1,800 after all June adjusting entries had been processed. The exchange was for a new computer having a fair value of $950. The transaction has commercial substance. Using this information, how much should be recorded on July 1 for the following accounts:

1. Accumulated Depreciation, Equipment

2. Gain or (Loss) on Sale (Enter any loss amount with $ sign inside of brackets)

3. Equipment - New

Question 5 - Alpha Company was recently sold for $1,500,000. Alpha assets & liabilities consisted of the following:

Item Amount

Cash $125,000

Inventory $250,000

Property, Plant & Equipment (net) $600,000

Accounts Payable $210,000

Using this information, how much should be recorded as Goodwill for this transaction?