Reference no: EM132240416

Questions -

Q1) Alpha Company made a lump sum purchase of land, building, and equipment. The following were the appraised values of each element:

PP&E Element Amount

Land $10,000

Building 20,000

Equipment 30,000

Alpha paid $45,000 cash for the lump sum purchase. What value should be allocated to the following? (Enter only whole dollar values.)

1. Land

2. Building

3. Equipment

Q2) On January 2, 2016, Alpha Company acquired a new machine by signing a 5 year note for $62,000. The estimated service life is eight years and the total units of output to be 200,000. The estimated residual value is $8,000. Using the straight-line method, how much is: (Enter only whole dollar values.)

1. the 2017 depreciation expense

2. the accumulate depreciation after the fiscal year 2017 adjusting entry

3. the book value of the truck after the fiscal year 2017 adjusting entry

Q3) Bravo Company purchased equipment on October 1, 2016. Bravo paid $60,000 for equipment and paid an additional $500 for shipping and $200 to place the equipment in service. The equipment is expected to have a $6,000 residual value and a 8-year life. Bravo has a December 31 fiscal year end. Using the double-declining balance method, how much is: (Enter only whole dollar values.)

1. the 2018 depreciation expense

2. the accumulate depreciation after the fiscal year 2018 adjusting entry

3. the book value of the truck after the fiscal year 2018 adjusting entry

Q4) 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?

Q5) On July 1, 2016, Alpha Company purchased for $76,000, equipment having a service life of eight years and an estimated residual value of $4,000. Alpha has recorded depreciation of the equipment using the double-declining balance method. On December 31, 2018, before making any annual adjusting entries, the equipment was exchanged for new machinery having a fair value of $35,000. The transaction has commercial substance. Use this information to prepare a General Journal entries (without explanation) required to record the events for December 31, 2018.

Q6) On July 1, 2016, Alpha Company exchanged an old computer (Equipment) with a historical cost of $1,000 that had accumulated depreciation of $600 after all June adjusting entries had been processed. The exchange was for a new computer having a fair value of $500. 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

Q7) Alpha Mining Company recognizes $2 of depletion for each ton of ore mined. During 2016, 850,000 tons of ore were mined and 725,000 tons were sold. Using this information, how much should be recorded for FY 2016 for the following accounts:

1. Accumulated Depletion

2. Inventory

3. Cost of Goods Sold

Q8) On January 2, 2016, Alpha Company purchased a patent for $38,500 plus $2,000 in legal fees. On that date, the patent had a remaining legal life of 13 years. Alpha Company expects to use the patent for six years. Use this information to prepare the General Journal entry (without explanation) for December 31, 2016 end of the year adjusting entry. If no entry is required then write "No Entry Required."

Q9) Alpha Company was recently sold for $1,250,000. Alpha assets & liabilities consisted of the following:

Item Amount

Cash $75,000

Inventory $275,000

Property, Plant & Equipment (net) $750,000

Accounts Payable $350,000

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