Not logged in? Join one of the largest Debt Reduction Forums on the Internet! Join Now!  

Advertisments:


Useful Links:

FTC Debt Reduction Advice
FTC Money Matters Website
National Foundation For Credit Counselling
Debt Reduction UK
MyMoney.Gov

ACCOUNTING 110 HELP!!!!!!!!!!!!!!!?

Taxes! We hate paying them, so let's discuss maximizing tax deductions!

ACCOUNTING 110 HELP!!!!!!!!!!!!!!!?

Postby vychan » Tue Aug 16, 2011 7:09 pm

1. Trudy Company incurred the following costs.

Indicate to which account Trudy would debit each of the costs.

1. Sales tax on factory machinery purchased $5,000
2. Painting of and lettering on truck immediately upon purchase 700
3. Installation and testing of factory machinery 2,000
4. Real estate broker's commission on land purchased 3,500
5. Insurance premium paid for first year's insurance on new truck 880
6. Cost of landscaping on property purchased 7,200
7. Cost of paving parking lot for new building constructed 17,900
8. Cost of clearing, draining, and filling land 13,300
9. Architect's fees on self-constructed building 10,000

2. Here are selected 2010 transactions of Falk Corporation.

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2000. The machine cost $62,780 and had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2008. The computer cost $33,346 and had a useful life of 3 years with no salvage value. The computer was sold for $4,204 cash.
Dec. 31 Sold a delivery truck for $8,307 cash. The truck cost $27,022 when it was purchased on January 1, 2007, and was depreciated based on a 5-year useful life with a $2,121 salvage value.

Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Falk Corporation uses straight-line depreciation. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2. Round all answers to 0 decimal places, e.g. 3,330.)

Date Account/Description Debit Credit
Jan. 1

June 30

(To record depreciation)




(To record the sale)
Dec. 31

(To record depreciation)




(To record the sale)

3. In recent years Wang Company purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant selected the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.



Machine


Acquired


Cost


Salvage Value


Useful Life (in years)


Depreciation Method
1 Jan. 1, 2008 $101,400 $14,760 6 Straight-line
2 July. 1, 2009 95,800 10,210 5 Declining balance
3 Nov. 1, 2009 72,720 7,920 6 Units-of-activity

For the declining-balance method, Wang Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 24,000. Actual hours of use in the first 3 years were: 2009, 500; 2010, 4,900; and 2011, 5,400.

(a) Compute the amount of accumulated depreciation on each machine at December 31, 2011. (Round all answers to 0 decimal places, e.g. 2,510. For Units-of-activity method, round per unit cost to 2 decimal places, e.g. 25.10 before calculating depreciation.)


Machine 1 $
Machine 2 $
Machine 3 $

(b) If machine 2 was purchased on October 1 instead of July 1, what would be the depreciation expense for this Machine in 2009? In 2010?


2009 $
2010 $
vychan
 
Posts: 902
Joined: Tue Mar 22, 2011 6:06 am

ACCOUNTING 110 HELP!!!!!!!!!!!!!!!?

Postby gabrielo23 » Tue Aug 16, 2011 7:16 pm

Part 1
1. Debit Machinery $5,000
2. Debit Trucks $700
3. Debit Machinery $2,000
4. Debit Land $3,500
5. Debit Prepaid Insurance $880
6. Debit Land Improvements $7,200
7. Debit Land Improvements $17,900
8. Debit Land $13,300
9. Debit Building $10,000

Part 2.
January 1, 2010
Debit Accumulated Depreciation - Machine $62,780
Credit Machine $62,780

June 30, 2010
Debit Depreciation Expense $5,558
Credit Accumulated Depreciation - Computer $5,558 [(33,346 / 3) x 6/12]

June 30, 2010
Debit Cash $4,204
Debit Accumulated Depreciation - Computer $27,788
Loss on Sale of Computer $1,354
Credit Computer $33,346

December 31, 2010
Debit Depreciation Expense $4,980 [(27,022 - 2,121) / 5]
Accumulated Depreciation - Truck $4,980

December 31, 2010
Debit Cash $8,307
Debit Accumulated Depreciation - Truck $19,921
Credit Truck $27,022
Credit Gain on Sale of Truck $1,206

Part 3. (I worked these out on scratch paper, because I can't make tables with columns on here.)
(a)
Machine 1 $57,760
Machine 2 $71,659
Machine 3 $29,160

(b)
2009 $9,580
2010 $34,488
gabrielo23
 
Posts: 884
Joined: Tue Mar 22, 2011 12:53 am


Return to Taxes

 


  • Related topics
    Replies
    Views
    Last post