Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 11.7BE
To determine
To prepare: Journal entries to record circle city transportation’s activity.
Given information:
Cost incurred for oil changes is $2,000.
Cost incurred for filter changes is $5,000.
Cost incurred for tire rotation is $3,000.
Cost incurred for engine overhaul is $15,000.
Cost for retrofitting buses to function as party busses is $40,000.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
the company paid $500,000 to purchase the following:
a building with an appraised valued of $200,000
an operating permit valued at $100,000 and
ongoing reaserch and development projects valued at $150,00. In addition, it is estimated that the fair value of the order backlog associated with the products manufactured in the building is $100,000; this order backlog is includes as part of the purchase. make the journal entry necessary to revord this cash purchase.
The acquisition of a used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000 would be journalized with a debit to the asset account for?
Recording Subsequent Expenditures
The plant building of Xon Corporation is old (estimated remaining useful life is 12 years) and needs continuous maintenance and repairs. The company’s accounts show that the building originally cost $300,000; and accumulated depreciation was $200,000 at the beginning of the current year. During the current year, expenditures relating to the plant building are made.
Prepare the journal entry to record each of the following expenditures , assuming all items are paid in cash.Instructions
Round your answers to the nearest whole number
Record debit accounts in alphabetical order using the first letter of the account name.
1. Continuing, frequent, and low-cost repairs: $17,000
Account Name
Dr.
Cr.
2. Added a new storage shed attached to the building; estimated useful life of 8 years: $36,000
Account Name
Dr.
Cr.
3. Removed roof with original cost, $40,000; replaced it with…
Chapter 11 Solutions
Intermediate Accounting (2nd Edition)
Ch. 11 - Stephen J. Cosgrove is the Former Vice President....Ch. 11 - Prob. 11.2QCh. 11 - Prob. 11.3QCh. 11 - Prob. 11.4QCh. 11 - Will the expense/capitalization choice impact...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - For a long-lived operating asset acquired by...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Prob. 11.11QCh. 11 - What is the maximum amount of interest to be...Ch. 11 - Prob. 11.13QCh. 11 - Prob. 11.14QCh. 11 - Prob. 11.15QCh. 11 - Do firms expense all costs incurred after the...Ch. 11 - Prob. 11.17QCh. 11 - Prob. 11.18QCh. 11 - When using the double-declining balance...Ch. 11 - Prob. 11.20QCh. 11 - Will a firm recognize a loss on the income...Ch. 11 - Prob. 11.22QCh. 11 - Prob. 11.23QCh. 11 - Prob. 11.24QCh. 11 - Prob. 11.25QCh. 11 - Differentiate between a leasehold and a leasehold...Ch. 11 - Prob. 11.27QCh. 11 - Prob. 11.28QCh. 11 - Prob. 11.29QCh. 11 - Prob. 11.30QCh. 11 - Prob. 11.31QCh. 11 - Prob. 11.32QCh. 11 - Prob. 11.33QCh. 11 - Prob. 11.34QCh. 11 - Prob. 11.35QCh. 11 - Prob. 11.36QCh. 11 - Prob. 11.37QCh. 11 - Prob. 11.38QCh. 11 - Prob. 11.39QCh. 11 - Prob. 11.40QCh. 11 - In a nonmonetary exchange does a firm record the...Ch. 11 - Prob. 11.42QCh. 11 - Prob. 11.43QCh. 11 - Prob. 11.44QCh. 11 - Prob. 11.45QCh. 11 - Prob. 11.1MCCh. 11 - On January 1, Year 1, Bluebird Inc. borrowed 10...Ch. 11 - Prob. 11.3MCCh. 11 - Prob. 11.4MCCh. 11 - Prob. 11.5MCCh. 11 - Prob. 11.6MCCh. 11 - Prob. 11.7MCCh. 11 - Prob. 11.8MCCh. 11 - Determining Acquisition Cost. Haply, Inc. incurred...Ch. 11 - Determining Acquisition Cost. Tarpley, Inc....Ch. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Prob. 11.7BECh. 11 - Prob. 11.8BECh. 11 - Depreciation, Straight-Line Method. Hermit...Ch. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Prob. 11.13BECh. 11 - Derecognition Due to Abandonment. Greene Corp....Ch. 11 - Prob. 11.15BECh. 11 - Prob. 11.16BECh. 11 - Prob. 11.17BECh. 11 - Prob. 11.18BECh. 11 - Prob. 11.19BECh. 11 - Prob. 11.20BECh. 11 - Leasehold Improvements. At the beginning of its...Ch. 11 - Determining Acquisition Cost. St Charles Flooring...Ch. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Acquiring an Asset with a Note Payable (Deferred...Ch. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Capitalization of Interest, Specific and General...Ch. 11 - Prob. 11.8ECh. 11 - Prob. 11.9ECh. 11 - Capitalization of Interest, Specific and General...Ch. 11 - Prob. 11.11ECh. 11 - Expensing versus Capitalizing ExpendituresAnalysis...Ch. 11 - Depreciation Methods, Disposal. Kurtis Koal...Ch. 11 - Prob. 11.14ECh. 11 - Depreciation Methods, Partial-Year Depreciation....Ch. 11 - Prob. 11.16ECh. 11 - Depreciation Methods. Ace Manufacturing, Inc....Ch. 11 - Prob. 11.18ECh. 11 - Depreciation Methods, Partial-Year Depreciation,...Ch. 11 - Prob. 11.20ECh. 11 - Partial-Year Depreciation, Sale of Property,...Ch. 11 - Prob. 11.22ECh. 11 - Disclosure of Property, Plant, and Equipment. Use...Ch. 11 - Disclosure of Property, Plant, and Equipment,...Ch. 11 - Prob. 11.25ECh. 11 - Research and Development Activities. During the...Ch. 11 - Prob. 11.27ECh. 11 - Goodwill Computation, Acquisition of Intangibles,...Ch. 11 - Prob. 11.29ECh. 11 - Prob. 11.30ECh. 11 - Prob. 11.31ECh. 11 - Prob. 11.32ECh. 11 - Prob. 11.33ECh. 11 - Prob. 11.34ECh. 11 - Prob. 11.35ECh. 11 - Prob. 11.36ECh. 11 - Prob. 11.37ECh. 11 - Exchanges Lacking Commercial Substance, Cash...Ch. 11 - Prob. 11.39ECh. 11 - Prob. 11.41ECh. 11 - Prob. 11.42ECh. 11 - Note Payable Exchanged for a Plant Asset (Deferred...Ch. 11 - Prob. 11.2PCh. 11 - Prob. 11.3PCh. 11 - Depreciation Methods and Depreciation Schedules....Ch. 11 - Prob. 11.5PCh. 11 - Disposals of Long-Term Operating AssetsAnalysis,...Ch. 11 - Goodwill and Bargain Purchase Computations. The...Ch. 11 - Prob. 11.8PCh. 11 - Prob. 11.9PCh. 11 - Prob. 11.10PCh. 11 - Prob. 11.11PCh. 11 - Judgment Case 1: Property, Plant, and Equipment:...Ch. 11 - Prob. 2JCCh. 11 - Financial Statement Analysis Case Financial...Ch. 11 - Surfing the Standards Cases Surfing the Standards...Ch. 11 - Prob. 2SSCCh. 11 - Surfing the Standards Case 3: Involuntary...Ch. 11 - Prob. 4SSCCh. 11 - Prob. 5SSCCh. 11 - Prob. 1BCCCh. 11 - Prob. 2BCC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Expenditures After Acquisition Listed below are several transactions: a. Paid $80 cash to replace a minor part of an air conditioning system. b. Paid $40,000 to fix structural damage to a building. c. Paid $8,000 for monthly salaries. d. Paid $12,000 to replace a manual cutting machine with a computer-controlled machine. e. Paid $1,000 related to the annual painting of a building. Required: Classify each transaction as either a revenue expenditure, a capital expenditure, or neither.arrow_forwardDuring the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?arrow_forwardDuring the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated five machines for $100,000 to improve efficiency in production of their remaining useful life of five years Low-cost repairs throughout the year totaled $70,000 Replaced a broken gear on a machine for $10,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?arrow_forward
- Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?arrow_forwardPrepare journal entries for the following transactions: a. A machine with a cost of 10,000 and accumulated depreciation of 8,000 was sold for 2,500. b. A machine with a cost of 10,000 and accumulated depreciation of 8,000 was traded for a new machine with a market value of 12,000. Cash of 9,500 was also paid.arrow_forwardAt the beginning of current year, Exodus Company purchased a machine for 8,000,000 and received a government grant of 2,000,000 toward the capital cost. The machine is to be depreciated on a straight line basis over 10 years and estimated to have a residual value of 500,000 at the end of this period. Required: Prepare journal entries for the current year assuming the grant is accounted for as deferred income and deduction from asset.arrow_forward
- Sarasota Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment. Abstract company’s fee for title search $1,118 Architect’s fees 6,816 Cash paid for land and dilapidated building thereon 187,050 Removal of old building $43,000 Less: Salvage 11,825 31,175 Interest on short-term loans during construction 15,910 Excavation before construction for basement 40,850 Machinery purchased (subject to 2% cash discount, which was not taken) 118,250 Freight on machinery purchased 2,881 Storage charges on machinery, necessitated by noncompletion of building when machinery was delivered 4,687 New building constructed (building construction took 6 months from date of purchase of land and old building) 1,042,750 Assessment by city for drainage project 3,440 Hauling charges for delivery of…arrow_forwardCrane Company incurred the following costs during the current year in connection with its research and development activities. Cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years (uses straight-line depreciation) $291,500 Materials consumed in R&D projects 57,300 Consulting fees paid to outsiders for R&D projects 133,000 Personnel costs of persons involved in R&D projects 138,500 Indirect costs reasonably allocable to R&D projects 47,300 Materials purchased for future R&D projects 34,300 Compute the amount to be reported as research and development expense by Crane on its current year income statement. Assume equipment is purchased at the beginning of the year. Total to be expensed for research and Development $enter the total dollar amount to be expensed as research and developmentarrow_forwardRattles Co. provided the following information relevant to the research and development expenditures for the year 2022: Current period depreciation on the building housing R and D activities. 1,500,000 Cost of market research study. 1,000,000Current period depreciation on a machine used in R and D activities 500,000 Salary of R and D director. 1,200,000 Salary of Vice-President who spends 1⁄4 of his time overseeing R and D activities. 2,400,000 Pension costs for salary of R and D director. 50,000Pension costs for salary of Vice-President 100,000 The R and D expense for the current period should be A. 3,875,000 B. 5,750,000 C. 4,875,000 D. 3,800,000arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
What is Fund Accounting?; Author: Aplos;https://www.youtube.com/watch?v=W5D5Dr0j9j4;License: Standard Youtube License