On April 12, 2020, Prism Ltd., a camera lens manufacturer, paid cash of $559,400 for real estate plus $30,100 cash in closing costs. The real estate included land appraised at $210,350; land improvements appraised at $78,130; and a building appraised at $312,520. PPE Asset (a) Appraised Values (b) Ratio of Individual Appraised Value to Total Appraised Value (a) Total Appraised Value (c) Cost Allocation (b) Total Actual Cost Present the journal entry to record the purchase. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) View transaction list

On April 12, 2020, Prism Ltd., a camera lens manufacturer, paid cash of $559,400 for real estate plus $30,100 cash in closing costs. The real estate included land appraised at $210,350; land improvements appraised at $78,130; and a building appraised at $312,520. PPE Asset (a) Appraised Values (b) Ratio of Individual Appraised Value to Total Appraised Value (a) Total Appraised Value (c) Cost Allocation (b) Total Actual Cost Present the journal entry to record the purchase. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) View transaction list

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 38P

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Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?
Johnson, Incorporated, had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for extraordinary repairs Depreciation expense recorded for the year is $15,000. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Johnsons balance sheet resulting from this years transactions? What amount did Johnson report on the income statement for expenses for the year?
Investing Activities and Depreciable Assets Verlando Company had the following account balances and information available for 2019: During 2019, Verlando recorded the following transactions affecting these accounts: a. Land with a carrying value of 35,000 was sold at a loss of 6,000. b. Land and equipment were purchased with cash during the period. c. Equipment with an original cost of 20,000 that had a book value of 4,000 was written off as obsolete. d. A building with an original cost of 60,000 and accumulated depreciation of 25,000 was sold at a 23,000 gain. e. Depreciation expense and amortization expense were recorded. f. Net income for the year was 60,000. g. A patent was acquired during the year in exchange for 1,200 shares of common stock with a par value of 1 per share and a market value of 26 per share. h. Additional marketable securities wefe purchased during the year. i. Verlando Company has no notes payable in the liabilities section of its balance sheet. Required: 1. Next Level Assuming that Verlando uses the indirect method to determine operating cash flows, what is the amount of depreciation expense and amortization expense that would be added back to net income: 2. Prepare the investing activities section of the statement of cash flows for the year ended December 31, 2019. 3. Prepare the disclosure for significant noncash transactions for the statement of cash flows for the year ended December 31, 2019.
For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. A. A landscaper received a customers order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year. B. A company divides its income statements into four quarters for the year. C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000. D. Brandys Flower Shop is forecasting its balance sheet for the next five years. E. When preparing financials for a company, the owner makes sure that the expense transactions are kept separate from expenses of the other company that he owns. F. A company records the expenses incurred to generate the revenues reported.
On December 31, 2018 Change Co. showed the following account balances in his general ledger: Land $330,000 Building and plant facilities 990,000 Machinery and equipment 975,000 During 2019, the following transactions occurred. 1. Land site A was acquired for $650,000 plus legal fees on closing of $40,000. 2. Land site B, with a building, was acquired for $720,000. The closing statement indicated that the land value was $500,000 and the building value was $300,000. Shortly after acquisition, the building was removed and sold to a third party for $50,000. A new building was constructed for $460,000, plus the following costs: Architectural design fees $45,000 Excavation fees 58,000 Imputed interest on company funds 25,000 The imputed interest represents the amount of interest that the company would have paid if it had borrowed money to construct the building. The building was completed and occupied at the end of November 2019. 3. A group of machines was purchased under a royalty agreement…
On May 1, 2021, Q Incorporated entered into the following transactions: a. Paid advertising expense amounting to 120,000 which would cover a period of two years (the current year and the succeeding year) b. Acquired an equipment costing 1 million. PPEs are depreciated over a 5-year useful life using the straight-line method c. A machinery was sold at a loss of 50,000. When the company prepares the income statement for the first quarter of the year, at what amount will these be reflected? a. None of these will be recognized or considered in the preparation of the first quarter income statement b. 15,000 for the advertising expense, 50,000 for the depreciation of equipment and 12,500 for the loss on sale of machinery c. 15,000 for advertising expense d. Answer not among the choices e. 15,000 for advertising expense and 12,500 for the loss on sale of machinery
At December 31, 2018, certain accounts included in the property, plant, and equipment section of Townsand Company's balance sheet had the following balances: Land $100,000 Buildings 800,000 Leasehold improvements 500,000 Machinery and equipment 700,000 During 2019, the following transactions occurred: Land site number 621 was acquired for $1,000,000. Additionally, to acquire the land, Townsand paid a $60,000 commission to a real estate agent. Costs of $15,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $5,000. A second tract of land (site number 622) with a building was acquired for $300,000. The closing statement indicated that the land value was $200,000 and the building value was $100,000. Shortly after acquisition, the building was demolished at a cost of $30,000. A new building was constructed for $150,000 plus the following costs: Excavation fees $11,000 Architectural design…
At December 31, 2019, certain accounts included in the property, plant, and equipment section of Oriole Company’s balance sheet had the following balances. Land $236,300 Buildings 895,000 Leasehold improvements 666,400 Equipment 882,500 During 2020, the following transactions occurred. 1. Land site number 621 was acquired for $859,000. In addition, to acquire the land Oriole paid a $60,700 commission to a real estate agent. Costs of $40,700 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $20,500. 2. A second tract of land (site number 622) with a building was acquired for $420,400. The closing statement indicated that the land value was $301,400 and the building value was $119,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $331,100 plus the following costs. Excavation fees $38,300 Architectural design…
Tristar Production Company began operations on September 1, 2024. Listed below are a number of transactions that occurred during its first four months of operations. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $200,000 in cash for the property. According to appraisals, the land had a fair value of $134,200 and the building had a fair value of $85,800. On September 1, Tristar signed a $50,000 noninterest-bearing note to purchase equipment. The $50,000 payment is due on September 1, 2025. Assume that 8% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,500. On September 18, the company paid its lawyer $8,000 for organizing the corporation. On October 10, Tristar purchased equipment for cash. The purchase price was $25,000 and $1,000 in freight charges also were paid. On December 2, Tristar acquired equipment. The company was short of cash…
Jada Company had the following transactions during the year: Purchased a machine for $430,000 using a long-term note to finance it. Paid $520 for ordinary repair. Purchased a patent for $42,000 cash. Paid $200,000 cash for addition to an existing building. Paid $51,000 for monthly salaries. Paid $280 for routine maintenance on equipment. Paid $10,000 for major repairs. Depreciation expense recorded for the year is $30,000. A. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions? $fill in the blank 1 B. What amount did Jada report on the income statement for expenses for the year? $fill in the blank 2 Feedback
Jada Company had the following transactions during the year: Purchased a machine for $440,000 using a long-term note to finance it. Paid $460 for ordinary repair. Purchased a patent for $48,000 cash. Paid $160,000 cash for addition to an existing building. Paid $52,000 for monthly salaries. Paid $240 for routine maintenance on equipment. Paid $10,000 for major repairs. Depreciation expense recorded for the year is $20,000. A) If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions? B) What amount did Jada report on the income statement for expenses for the year?
Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it. Paid $550 for ordinary repair. Purchased a patent for $44,000 cash. Paid $180,000 cash for addition to an existing building. Paid $50,000 for monthly salaries. Paid $260 for routine maintenance on equipment. Paid $10,000 for major repairs. Depreciation expense recorded for the year is $25,000. A. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions? $fill in the blank 1 B. What amount did Jada report on the income statement for expenses for the year? $fill in the blank 2