1-2. Three common depreciation methods are units-of-production, 1.______________
ID: 2444108 • Letter: 1
Question
1-2. Three common depreciation methods are units-of-production,1._________________________, and
2._________________________.
3.The periodic write-off of the cost of an intangible asset to expense is called
4.Costs that are chargeable to an asset account or its related accumulated depreciation account are termed
5.Cost of an asset minus its accumulated depreciation is called
6.Long-lived assets that are useful in the operations of a business, that are not held for sale, and that have no physical qualities are usually classified on the balance sheet as
7-9.The following expenditures are related to land acquired for use by a busi-ness. Indicate the account that should be debited for each expenditure …
7.Cost of paving parking areas
8.Cost of razing unwanted building
9.Realty broker’s commission paid in purchasing land
10-13. The following expenditures are related to equipment acquired for use
by a business. Indicate the account that should be debited for each expenditure.
10.Cost of vandalism on the equipment during installation
11.Special foundation
12.New parts to replace those damaged in installation
13.Installation costs
14.A patent is referred to as a (n)
15.The expense account for using natural resources is
1-3. Equipment priced at $130,000 is acquired by trading in a similar asset and paying $115,000.
1.If the book value of the asset traded in was $23,000, the cost basis of the new asset is
2. If the book value of the asset traded in had been $8,000, the cost basis of the new asset would be
3. If the assets traded in #1 had been dissimilar, the cost basis of the new asset is
4. A patent with a cost of $150,000 has an estimated useful life of 5 years and a legal life of 12 years. The annual amortization is
5-7. Machinery acquired on the first day of the current fiscal year for $750,000 has an estimated useful life of 5 years or 50,000 hours and a residual value of $0. Determine the depreciation for the current year by each of the following methods:
5. Straight-line
6. Double -declining-balance
7. Units-of-production (the equipment was used for 5,000 hours during
the year)
8-9. Based on the data in Question 5-7, and assuming that the machinery
was used for 10,000 hours in the second year, determine the deprecia-tion for the second year by each of the following methods:
8. Double -declining-balance
9. Units-of-production
10-11. Based on the data in Question 5-7, and assuming that the machinery
was used for 5,500 hours in the third year, determine the depreciation
for the third year by each of the following methods:
10. Double -declining-balance
11. Units-of-production
ACCOUNTS
A. Accounts Receivable F.Depletion Expense K.Notes Payable
B. Accumulated Depletion G.Equipment L.Notes Receivable
C.Accumulated Depreciation—Equipment H.Gain on Disposal of Fixed Assets M. Research and Development
D. Amortization Expense—Patents I.Goodwill Expense
E. Cash J. Loss on Disposal of Fixed Assets N. Patents
1-2. Traded in old equipment for similar equipment priced at $75,000, receiving a trade-in allowance of $8,000 and paying the balance in cash. (Cost of the old equipment was $37,500; accumulated depreciation, $30,000)
3-4. Traded in equipment costing $47,500, with accumulated depreciation of $30,000, for similar equipment priced at $60,000; received a trade-in allowance of $5,000 and issued a note for the balance
5-6. Paid research and development expense, $40,000
7-8. Discarded equipment: cost, $83,750; accumulated depreciation, $82,750
9-10. Sold for $5,000 cash the following equipment: cost, $57,500; accumulated depreciation, $55,000
11-12. Sold on account for $8,000 the following equipment: cost, $32,000; accumulated depreciation, $15,000
13-14. Recorded depletion, $18,500
Credit and Debit for each number...what account goes with each credit and debit..may be more than 1
Explanation / Answer
1-2. Three common depreciation methods are units-of-production, 1. Straight-line, and 2. Declining balance 3. The periodic write-off of the cost of an intangible asset to expense is called Amortization 4. Costs that are chargeable to an asset account or its related accumulated depreciation account are termed Improvements 5. Cost of an asset minus its accumulated depreciation is called Book value 6. Long-lived assets that are useful in the operations of a business, that are not held for sale, and that have no physical qualities are usually classified on the balance sheet as Intangible assets 7-9. The following expenditures are related to land acquired for use by a busi-ness. Indicate the account that should be debited for each expenditure … 7. Cost of paving parking areas Land Improvements 8. Cost of razing unwanted building Land 9. Realty broker’s commission paid in purchasing land Land 10-13. The following expenditures are related to equipment acquired for use by a business. Indicate the account that should be debited for each expenditure. 10. Cost of vandalism on the equipment during installation Equipment. *Note: All costs related to the equimpment before it is put into service should be added to the cost of the equipment. 11. Special foundation Equipment 12. New parts to replace those damaged in installation Equipment *See 10 above 13. Installation costs Equipment 14. A patent is referred to as a (n) Intangible asset 15. The expense account for using natural resources is Depletion expense PART 2 If the book value of the asset traded in was $23,000, the cost basis of the new asset is $115,000 + $23,000 = $138,000 but the cost basis is capped at $130,000 since cost cannot be higher than market. ...If the book value of the asset traded in had been $8,000, the cost basis of the new asset would be $115,000 + $8,000 = $123,000 ...If the book value of the asset traded in had been $15,000, the cost basis of the new asset would be $115,000 + $15,000 = $130,000 OTHER PARTS Part Three: I found these answered ANALYSIS OF TRANSACTION AND ADJUSTMENTS Instructions: In recording the selected transactions and adjustments, indicate the titles of the general accounts to be debited and credited by inserting in the appropriate the letters that correspond to the account titles listed. ACCOUNTS: A. Accounts Payable B. Accounts Receivable C. Allowance for Doubtful Accounts D. Cash E. Interest Expense F. Interest Revenue G. Interest Payable H. Interest Receivable I. Misc. Administrative Expense J. Notes Payble K. Notes Receivable L. Bad Debt Expense Transactions: 0. Received the final payment on a promissory note = D (Debit) and K,F (Credit) 1-2. Recorded the adjusting entry for estimated uncollectible accounts at the end of the fiscal period, based upon the allowance method = L (Debit) and C (Credit) 3-4. Wrote off the amount of the bankrupt debtor (included in Allowance for Doubtful Accounts provision had been made in Question 1-2) = C (Debit) and B (Credit) 5-6. Recovered the bad debt written off in Question 3-4 = B (Debit) and C (Credit) 7-8. Replaced a customer's account receivable with a note receivable = K (Debit) and B (Credit) PRINCIPLES AND TERMINOLOGY Instructions: Complete each of the following statements by writing the appropriate words in the Answers. 0. The depreciation method that varies the amount of depreciation with the asset's usage is called = UNITS-OF-PRODUCTION 1-2. Three common depreciation methods are units-of-production = 1) STRAIGHT-LINE and 2) DOUBLE DECLINING-BALANCE 3. The periodic write-off of the cost of an intangible asset to expense is called = AMORTIZATION 4. Costs that are chargeable to an asset account or its related accumulated depreciation account are termed = CAPITAL EXPENDITURES 5. Cost of an asset minus its accumulated depreciation is called = BOOK VALUE 6. Long-lived assets that are useful in the operations of a business, that are not held for sale, and that have no physical qualities are usually classified on the balance sheet as = INTANGIBLE ASSETS 7-9. The following expenditures are related to land acquired for use by a business. Indicate the account that should be debited for each expenditure = 7) LAND IMPROVEMENTS 8. Cost of paving parking areas = LAND 9. Realty broker's commission paid in purchasing land = LAND 10-13. The following expenditures are related to equipment acquired for use by a business. Indicate the account that should be debited for each expenditure. 10. Cost of vandalism on the equipment during installation = REPAIR EXPENSE 11. Special foundation = MACHINERY AND EQUIPMENT 12. New parts to replace those damaged in installation = REPAIR EXPENSE 13. Installation costs = MACHINERY AND EQUIPMENT 14. A patent is reffered to as a(n) = INTANGIBLE ASSETS 15. The expense account for using natural resources is = DEPLETION PROBLEMS Instructions: Solve each of the following problems and record the answers in the Answers. 0. If the cost of a fixed assets is $50,000 and its accumulated depreciation is $35,000, its book value is = $15,000 1-3. Equipment priced at $130,000 is acquired by trading in a similar asset and paying $115,000. 1. If the book value of the asset traded in was $23,000, the cost basis of the new asset is = $130,000 2. If the book value of the asset traded in had been $8,000, the cost basis of the new asset would be = $123,000 3. If the book value of the asset traded in had been $15,000, the cost basis of the new asset would be = $130,000 4. A patent with a cost of $150,000 has an estimated useful life of 5 years and a legal life of 12 years. The annual amortization is = $30,000 5-7. Machinery acquired on the first day of the current fiscal year for $750,000 has an estimated useful life of 5 years or $50,000 hours and a residual value of $0. Determine the depreciation for the current year by each of the following methods: 5. Straight-line = $150,000 6. Double-declining-balance = $300,000 7. Units-of-production (the equipment was used for 5,000 hours during the year) = $75,000 8-9. Based on the data in Questions 5-7, and assuming that the machinery was used for 10,000 hours in the second year, determine the depreciation for the second year by each of the following methods: 8. Double-declining-balance = $180,000 9. Units-of-production = $150,000 10-11. Based on the data in Questions 5-7, and assuming that the machinery wasUnits-of-production = $82,500 Posted by Neo 994 days and 8 hours ago. Expert's Answer PART IV ACCOUNTS A. Accounts Payable B. Accounts Receivable C. Allowance for Doubtful Accounts D. Bad debt Expense E. Cash F. Interest Expense G. Interest Revenue H. Notes Payable I. Notes Receivable Transactions: 0. Received an interest-bearing note from a customer on account = I (Debit) and B (Credit) 1-2. Recorded Bad Debt Expense calculated as a percentage of sales = ? (Debit) and ? (Credit) Debit. Bad Debt Expense (D) Credit. Allowance for Doubtful Accounts (C) 3-4. Wrote off an uncollectible account using the direct-write off method = ? (Debit) and ? (Credit) Debit. Bad Debt Expense (D) Credit. Accounts Receivables (B) 5-6. Wrote off an uncollectible account using the allowance method = ? (Debit) and ? (Credit) Debit. Allowance for Doubtful Accounts (C) Credit. Accounts Receivable (B) 7-8. Reinstated the amount writen off in Question 5-6 above = ? (Debit) and ? (Credit) Debit. Accounts receivable (B) Credit. Allowance for Doubtful Accounts (C) 9-11. Received payment in full, plus interest, on the note in Question 0 above = ?(Debit) and ? (Credit) Debit. Cash (E) Credit. Interest revenue (G), Notes Receivable (I) Posted by Neo 994 days and 8 hours ago. Expert's Answer PART V Problems Instructions: solve the following problems and records the answer. 0. How long if the legal life of a patent? = 20 years. 1. If bad debt expense is estimated at 3% of net sales, sales for the period were $32,500, and the sales returns were $2,500, bad debt expense for the period is = $900 2. The interest on a $6,000 12%, 90-day note is = $180 3-5. If the allowance for doubtful accounts had a credit balance of $700 before ajustment and analysis of accounts receivable indicates doubtful accounts of $5,100, the journal entry to record the ajustment would include: 3). A debit to which account? = Bad Debt Expense 4). A credit to which account? = Allowance for Doubtful Accounts 5). The amount of the ajustment is = $4,400 6. If the balance in the allowance for doubtful accounts in Question 3 above had been a debit, the amount of the adjustment would be = $5,800 7. If land had a purchase cost of $12,000, broker fees were $600, city filing fees were $200, and a temporary sign showing that the property was to be used for the site for a bank cost $75, the cost debited to the land account is = $12,800 8-11. New equipement costing $46,000 has an exceped residual value of $6,000, an expected life of 8 years, and expected production of 50,000 units. Indicate annual deprciation for years one and two under the following assumptions: 8) year 1, straight-line method = $5,000 9) year 2, straight-line method = $5,000 10) year 1, double-declining-balance method = $11,500 11) year 2, double-decling-balance method = $8,625 12. Year 1, units-of-production method if 9,500 units were made = $7,600 13. If a company invests $15,000 in the research and development of a new product which is later patented, the amount debited to the patent account is = $15,000 14. Minimun annual amortizatiopn expense for a trademark purchased for $40,000 is = $0.
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