Tarling\'s Tungsten Tablets, Inc. began operation on January 1, 2013. The compan

Question

Tarling's Tungsten Tablets, Inc. began operation on January 1, 2013. The company immediately acquired some fixed assets for manufacturing purposes. The assets acquired and their useful lives are as follows: On December 31 three transactions were incurred: A machine received a $ 100,000 improvement that increased its utility; $50,000 was spent on ordinary maintenance; and, A vehicle with an initial value of $25,000 was sold for $20,000. Please provide the following: A workpaper that displays the account changes leading to ending balances for fixed assets, depreciation, accumulated depreciation, gain or loss on sales of assets, and repairs and maintenance. Prepare the footnote for property, plant and equipment.

Explanation / Answer

Calculation of Depreciation Assets Value Life Depreciaion(Value/Life) Accumulated dep Vehicles $75,000 3 $25,000 $25,000 Manufacturing Equipment $700,000 7 $100,000 $125,000 Leasehold Improvement $150,000 15 $10,000 $135,000 Office furniture and fixture $100,000 10 $10,000 $145,000 Gain or loss on assets Particular Amount Initial Value $25,000 Sale $20,000 Net Loss $5,000 Repair and maintenance $50,000 Net Balance of Asset Asset Value Depreciation Net Balance Vehicles $75,000 $25,000 $50,000 Manufacturing Equipment $700,000 $100,000 $600,000 Leasehold Improvement $150,000 $10,000 $140,000 Office furniture and fixture $100,000 $10,000 $90,000 Asset Aquired $100,000 $100,000

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