20.On Dec. 28 Star Wars, Inc. sold a used Star Destroyer to Chewbacca and Sons C
ID: 2476091 • Letter: 2
Question
20.On Dec. 28
Star Wars, Inc. sold a used Star Destroyer to Chewbacca and Sons Co. for $30,100 cash. The original cost of the Star Destroyer was $200,000 with a salvage value of $25,000, a useful life of 10 years, and accumulated depreciation of $100,000 through the end of last fiscal year. Note: you will need to record 1/2's years depreciation for this year before recording the sale (the company policy is to depreciate assets for 1/2 year in the year of acquisition and disposal). Star Wars, Inc. uses the straight-line method to depreciate Star Destroyers.
Note: record depreciation expense first, then the disposal.
21.On Dec. 28 Paid the A/P balance to Tattoine Inc from the 12/19 purchase. No discount applies.2w.On Dec. 28 The Board of Directors of Star Wars Inc. declares a $2.50 per share cash dividend to be paid in January of the next year. You will need to determine the number of shares outstanding. See instructions for the beginning amount and don't forget to take into account previous transactions involving new shares issued. Take the amount directly out of retained earnings.
22.On Dec. 28 Paid bill for advertisements run on Dec. 15th. The bill was for $9,150.
23.On Dec. 28 Received payment from Vader Enterprises from the Dec. 13 sale. No discount applies.
24.On Dec. 30 Purchased 280 units of product from Hyperspace Unlimited for $385 per unit on credit, terms n/30
25.On Dec. 31 Sold 180 units to Vader Enterprises for $830 each on credit.
26.On Dec. 31
The petty cash custodian performs the month-end reconciliation and totals the receipts as follows:
Postage stamps used $58
Courier costs $73
Company lunch costs $61
Office decorations $30
$68 of cash remained on hand. Record the entry to reimburse the petty cash fund. Book any overage or shortage to Petty Cash Overage/Shortage. Use Misc. expense for all costs noted above.
27.On Dec. 31 Deposited $30,000 in a bond sinking fund (related to paying back bonds payable). Use the Other assets account for the debit.
28.On Dec. 31 Record the journal entry to decrease the petty cash fund to $250 from $300.
Explanation / Answer
Workings: cost 200,000 Acc Dep 100,000 Dep current year 8,750 Total acc dep 108,750 WDV 91,250 Sale 30,100 Loss of sale (61,150) DEP: 8,750 (200000-25000)/10*1/2 Sale value Journal Debit Credit Dep 8,750 Acc Dep 8,750 cash 30,100 Loss of sale of asset 61,150 assets 91,250 - Accounts payable 9,150 - Cash 9,150 (adv exp paid) - - Inventory 107,800 Accounts payable 107,800 - accounts receivable 149,400 - Sales revenue 149,400 - Misc expe 222 Petty cash 222 Petty cash 222 cash 222 Postage stamps 58 - courier cost 73 company lunch cost 61 office dec 30 total 222 Sinking fund deposit 30,000 - cash 30,000 - cash 50 - petty cash 50
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