Consider each of the transactions below independently. All of the expenditures were made in cash.1. During 2020, PC Software Inc. developed a new personal computer database management software package. Totalexpenditures on the project were $800,000, of which 30% occurred after the technological feasibility of the product had beenestablished.2. Xon Corporation paid $35,000 in 2020 for continuing, frequent, and low-cost repairs to an existing building.3. In March, the Cleanway Laundromat bought equipment. Cleanway paid $5,000 down and signed a noninterest-bearing noterequiring the payment of $30,000 in nine months. The cash price for this equipment was $34,000.Required: Prepare all necessary journal entries to record each of the above transactions.Note: You may create a table as follows to organize your journal entries.DateAccount titlesDebitCreditCash10,00010,000Sales Revenue

Journal entry: A journal entry is used to record day-to-day transactions of the business by debiting…

Answered: 1. During 2020, PC Software Inc.…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 2EA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...

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For each of the following transactions, state whether the cost would be capitalized (C) or recorded as an expense (E). A. Purchased a machine, $100,000; gave long-term note B. Paid $600 for ordinary repairs C. Purchased a patent for $45,300 cash D. Paid $200,000 cash for addition to old building E. Paid $20,000 for monthly salaries F. Paid $250 for routine maintenance G. Paid $16,000 for major repairs
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 major repairs Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jadas balance sheet resulting from this years transactions? What amount did Jada report on the income statement for expenses 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?
Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.
During 2024, a software company incurred development costs of $2,000,000 related to a new software project. Of this amount, $400,000 was incurred after technological feasibility was achieved. The project was completed in the middle of the year and the product was available for release to customers on July 1. Revenues from the sale of the new software in 2024 were $500,000 and the company anticipated future additional revenues of $4,500,000. The economic life of the software is estimated at four years. What is amortization in 2024?
Consider each of the transaction below independently. All expenditures were made in cash During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $800,000, of which 30% occurred after the technological feasibility of the product had been established. Prepare all necessary journal entries to record each the transaction. Use this format: Date Account Titles DR CR
I need help with these three questions. On January 1, 2022, Martinez Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $54,500. Related expenditures also paid in cash included: sales tax $2,050, shipping costs $100, insurance during shipping $110, installation and testing costs $80, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Martinez estimates that the useful life of the machine is 5 years with a $4,100 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Machine B: The recorded cost of this machine was $180,000. Martinez estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period. 1. For Machine A, prepare the journal entry to record its purchase on January 1, 2022 and record annual depreciation at December 31,…
On March 1, 2022, Ayayai Company acquired real estate on which it planned to construct a small office building, by paying $75,000 in cash. An old warehouse on the property was demolished at a cost of $8,000; the salvaged materials were sold for $1,500. Additional expenditures before construction began included $1,000 attorney’s fee for work concerning the land purchase, $4,000 real estate broker’s fee, $7,000 architect’s fee, and $13,000 to put in driveways and a parking lot.Determine the amount to be reported as the cost of the land. Cost of land $enter the cost of land in dollars
The following costs were incurred by Mark Corporation during 2020: Legal fees paid to attorneys in connection with a patent application related to a new invention developed by the company's laboratory personnel: $40,000. Salaries of personnel involved in searching for applications of new research findings: $150,000. Cost of machinery acquired on January 1, 2020: $355,000. The machinery will be used in a current research and development project, as well as several other R&D projects over the next eight years, after which the machine is expected to be sold for $15,000. Mark Corporation uses straight-line depreciation. Costs of design, construction, and testing of preproduction prototypes of potential new product lines for the company: $70,000. Cost of developing a valuable new product that was successfully patented: $100,000. Cost of marketing research to promote the new product: $60,000. Required:Calculate the total research and development expense that should appear in Mark's…
On March 1, 2022, Sandhill Co. acquired real estate, on which it planned to construct a small office building, by paying $85,000 in cash. An old warehouse on the property was demolished at a cost of $9,200; the salvaged materials were sold for $1,900. Additional expenditures before construction began included $1,400 attorney’s fee for work concerning the land purchase, $5,000 real estate broker’s fee, $8,900 architect’s fee, and $15,000 to put in driveways and a parking lot.(a) Determine the amount to be reported as the cost of the land. Cost of land $Enter a dollar amount
The text states, "Over sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners." Demonstrate the accuracy of this statement in the following scenario: Two friends contributed $50,000 each to form a new business. The owners used the amounts contributed to purchase a machine for $100,000 cash. They estimated that the useful life of the machine was five years and the salvage value was $20,000. They rented out the machine to a customer for an annual rental of $25,000 a year for five years. Annual cash operating costs for insurance, taxes, and other items totaled $6,000 annually. At the end of the fifth year, the owners sold the equipment for $22,000, instead of the $20,000 salvage value initially estimated. (Hint: Compute the total net income and the total cash flows other than cash flows with owners for the five-year period as a whole. If it doesn't impact Net Income, don't include it.)
On March 1, 2020, Pina Colada Corp. acquired real estate on which it planned to construct a small office building. The company paid $88,000 in cash. An old warehouse on the property was razed at a cost of $9,000; the salvaged materials were sold for $2,700. Additional expenditures before construction began included $1,400 attorney’s fee for work concerning the land purchase, $5,600 real estate broker’s fee, $7,600 architect’s fee, and $13,300 to put in driveways and a parking lot.(a)Determine the amount to be reported as the cost of the land. Cost of land $

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