ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Brief Exercise 11-1 (BE 11-1) Cardinal Company has the following obligations at December 31: (a) a note payable for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts payable of $60,000. For each obligation, indicate whether it should be classified as a current liability.(Assume an operating cycle of less than one year.)
Click here for the SOLUTION
Showing posts with label ACC 363. Show all posts
Showing posts with label ACC 363. Show all posts
Wednesday, July 7, 2010
Tuesday, July 6, 2010
P10-3A: Solomon Company: Solomon Company purchased the following two machines
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Problem 10-3A (P10-3A) On January 1, 2006, Solomon Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,500. Related expenditures included: sales tax $2,200, shipping costs $175, insurance during shipping $75, installation and testing costs $50, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Solomon estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period.
Machine B: The recorded cost of this machine was $100,000. Solomon estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period.
Instructions
(a) Prepare the following for Machine A. (1) The journal entry to record its purchase on January 1, 2006. (2) The journal entry to record annual depreciation at December 31, 2006, assuming the straight-line method of depreciation is used.
(b) Calculate the amount of depreciation expense that Solomon should record for machine B each year of its useful life under the following assumption. (1) Solomon uses the straight-line method of depreciation. (2) Solomon uses the declining-balance method.The rate used is twice the straight-line rate. (3) Solomon uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2006, 6,500 units; 2007, 7,500 units; 2008, 6,000 units; 2009, 5,000 units.
(c) Which method used to calculate depreciation on machine B reports the lowest amount of depreciation expense in year 1 (2006)? The lowest amount in year 4 (2009)? The lowest total amount over the 4-year period?
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Problem 10-3A (P10-3A) On January 1, 2006, Solomon Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,500. Related expenditures included: sales tax $2,200, shipping costs $175, insurance during shipping $75, installation and testing costs $50, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Solomon estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period.
Machine B: The recorded cost of this machine was $100,000. Solomon estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period.
Instructions
(a) Prepare the following for Machine A. (1) The journal entry to record its purchase on January 1, 2006. (2) The journal entry to record annual depreciation at December 31, 2006, assuming the straight-line method of depreciation is used.
(b) Calculate the amount of depreciation expense that Solomon should record for machine B each year of its useful life under the following assumption. (1) Solomon uses the straight-line method of depreciation. (2) Solomon uses the declining-balance method.The rate used is twice the straight-line rate. (3) Solomon uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2006, 6,500 units; 2007, 7,500 units; 2008, 6,000 units; 2009, 5,000 units.
(c) Which method used to calculate depreciation on machine B reports the lowest amount of depreciation expense in year 1 (2006)? The lowest amount in year 4 (2009)? The lowest total amount over the 4-year period?
Click here for the SOLUTION
BE 11-1 Cardinal Company Cardinal Company has the following obligations
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Brief Exercise 11-1 (BE 11-1) Cardinal Company has the following obligations at December 31: (a) a note payable for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts payable of $60,000. For each obligation, indicate whether it should be classified as a current liability.(Assume an operating cycle of less than one year.)
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Brief Exercise 11-1 (BE 11-1) Cardinal Company has the following obligations at December 31: (a) a note payable for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts payable of $60,000. For each obligation, indicate whether it should be classified as a current liability.(Assume an operating cycle of less than one year.)
Click here for the SOLUTION
P10-3A On January 1, 2006, Solomon Company Solomon Company Solomon Company purchased the following two machines for use
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Problem 10-3A (P10-3A) On January 1, 2006, Solomon Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,500. Related expenditures included: sales tax $2,200, shipping costs $175, insurance during shipping $75, installation and testing costs $50, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Solomon estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period.
Machine B: The recorded cost of this machine was $100,000. Solomon estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period.
Instructions
(a) Prepare the following for Machine A. (1) The journal entry to record its purchase on January 1, 2006. (2) The journal entry to record annual depreciation at December 31, 2006, assuming the straight-line method of depreciation is used.
(b) Calculate the amount of depreciation expense that Solomon should record for machine B each year of its useful life under the following assumption. (1) Solomon uses the straight-line method of depreciation. (2) Solomon uses the declining-balance method.The rate used is twice the straight-line rate. (3) Solomon uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2006, 6,500 units; 2007, 7,500 units; 2008, 6,000 units; 2009, 5,000 units.
(c) Which method used to calculate depreciation on machine B reports the lowest amount of depreciation expense in year 1 (2006)? The lowest amount in year 4 (2009)? The lowest total amount over the 4-year period?
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Problem 10-3A (P10-3A) On January 1, 2006, Solomon Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,500. Related expenditures included: sales tax $2,200, shipping costs $175, insurance during shipping $75, installation and testing costs $50, and $90 of oil and lubricants to be used with the machinery during its first year of operation. Solomon estimates that the useful life of the machine is 4 years with a $5,000 salvage value remaining at the end of that time period.
Machine B: The recorded cost of this machine was $100,000. Solomon estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period.
Instructions
(a) Prepare the following for Machine A. (1) The journal entry to record its purchase on January 1, 2006. (2) The journal entry to record annual depreciation at December 31, 2006, assuming the straight-line method of depreciation is used.
(b) Calculate the amount of depreciation expense that Solomon should record for machine B each year of its useful life under the following assumption. (1) Solomon uses the straight-line method of depreciation. (2) Solomon uses the declining-balance method.The rate used is twice the straight-line rate. (3) Solomon uses the units-of-activity method and estimates the useful life of the machine is 25,000 units. Actual usage is as follows: 2006, 6,500 units; 2007, 7,500 units; 2008, 6,000 units; 2009, 5,000 units.
(c) Which method used to calculate depreciation on machine B reports the lowest amount of depreciation expense in year 1 (2006)? The lowest amount in year 4 (2009)? The lowest total amount over the 4-year period?
Click here for the SOLUTION
E10-8: Yosuke Corporation: The following are selected 2006 transactions of Yosuke Corporation
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 10-8 (E10-8) The following are selected 2006 transactions of Yosuke Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. May 1 Purchased for $60,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
Instructions
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 10-8 (E10-8) The following are selected 2006 transactions of Yosuke Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. May 1 Purchased for $60,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
Instructions
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.
Click here for the SOLUTION
E10-6 Thomas Company Thomas Company Thomas Company
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 10-6 (E10-6) Presented below are selected transactions at Thomas Company for 2006.
Jan. 1 Retired a piece of machinery that was purchased on January 1, 1996. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2003. The computer cost $35,000. It had a useful life of 5 years with no salvage value. The computer was sold for $12,000.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2002. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.
Instructions
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Thomas Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2005.)
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 10-6 (E10-6) Presented below are selected transactions at Thomas Company for 2006.
Jan. 1 Retired a piece of machinery that was purchased on January 1, 1996. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2003. The computer cost $35,000. It had a useful life of 5 years with no salvage value. The computer was sold for $12,000.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2002. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.
Instructions
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Thomas Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2005.)
Click here for the SOLUTION
E9-2 The ledger of Elburn Company Elburn Company Elburn Company
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 9-2 (E9-2) The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and Allowances $28,000.
Instructions
(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Elburn determines that Copp’s $1,400 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be
(1) 1% of net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 9-2 (E9-2) The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and Allowances $28,000.
Instructions
(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Elburn determines that Copp’s $1,400 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be
(1) 1% of net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable
Click here for the SOLUTION
E9-8 Mexico Supply Co. has the following transactions related to notes receivable during the last 2 months of 2005
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 9-8 (E9-8) Mexico Supply Co. has the following transactions related to notes receivable during the last 2 months of 2005.
Nov. 1 Loaned $18,000 cash to Norma Hanson on a 1-year, 10% note.
Dec. 11 Sold goods to John Countryman, Inc., receiving a $6,750, 90-day, 8% note.
16 Received a $4,000, 6-month, 9% note in exchange for Bob Shabo's outstanding accounts receivable.
31 Accrued interest revenue on all notes receivable.
Instructions
(a) Journalize the transactions for Mexico Supply Co.
(b) Record the collection of the Hanson note at its maturity in 2006.
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Exercise 9-8 (E9-8) Mexico Supply Co. has the following transactions related to notes receivable during the last 2 months of 2005.
Nov. 1 Loaned $18,000 cash to Norma Hanson on a 1-year, 10% note.
Dec. 11 Sold goods to John Countryman, Inc., receiving a $6,750, 90-day, 8% note.
16 Received a $4,000, 6-month, 9% note in exchange for Bob Shabo's outstanding accounts receivable.
31 Accrued interest revenue on all notes receivable.
Instructions
(a) Journalize the transactions for Mexico Supply Co.
(b) Record the collection of the Hanson note at its maturity in 2006.
Click here for the SOLUTION
Monday, July 5, 2010
P9-7A On January 1, 2006, Bettendorf Company had Accounts Receivable $56,900
ACC 363
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Problem 9-7A (P9-7A) On January 1, 2006, Bettendorf Company had Accounts Receivable $56,900 and Allowance for Doubtful Accounts $4,700. Bettendorf Company prepares financial statements annually. During the year the following selected transactions occurred.
Jan. 5 Sold $6,900 of merchandise to John Yockey Company, terms n/30.
Feb. 2 Accepted a $6,900, 4-month, 10% promissory note from John Yockey Company for the balance due.
Feb.12 Sold $7,800 of merchandise to Skosey Company and accepted Skosey's $7,800, 2-month, 10% note for the balance due.
Feb. 26 Sold $3,000 of merchandise to Platz Co., terms n/10.
Apr. 5 Accepted a $3,000, 3-month, 8% note from Platz Co. for the balance due.
Apr.12 Collected the Skosey Company note in full.
June 2 Collected the John Yockey Company note in full.
July 5 Platz Co. dishonors its note of April 5. It is expected that Platz will eventually pay the amount owed.
July 15 Sold $7,000 of merchandise to King Co. and accepted King's $7,000, 3-month, 12% note for the amount due.
Oct.15 King Co.'s note was dishonored. King Co. is bankrupt, and there is no hope of future settlement.
Journalize the transactions.
Click here for the SOLUTION
Axia College of University of Phoenix (UoP)
Financial Accounting
Weygandt, Kieso, and Kimmel, 5th Edition
Financial Accounting II
Problem 9-7A (P9-7A) On January 1, 2006, Bettendorf Company had Accounts Receivable $56,900 and Allowance for Doubtful Accounts $4,700. Bettendorf Company prepares financial statements annually. During the year the following selected transactions occurred.
Jan. 5 Sold $6,900 of merchandise to John Yockey Company, terms n/30.
Feb. 2 Accepted a $6,900, 4-month, 10% promissory note from John Yockey Company for the balance due.
Feb.12 Sold $7,800 of merchandise to Skosey Company and accepted Skosey's $7,800, 2-month, 10% note for the balance due.
Feb. 26 Sold $3,000 of merchandise to Platz Co., terms n/10.
Apr. 5 Accepted a $3,000, 3-month, 8% note from Platz Co. for the balance due.
Apr.12 Collected the Skosey Company note in full.
June 2 Collected the John Yockey Company note in full.
July 5 Platz Co. dishonors its note of April 5. It is expected that Platz will eventually pay the amount owed.
July 15 Sold $7,000 of merchandise to King Co. and accepted King's $7,000, 3-month, 12% note for the amount due.
Oct.15 King Co.'s note was dishonored. King Co. is bankrupt, and there is no hope of future settlement.
Journalize the transactions.
Click here for the SOLUTION
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