Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 12, Problem 4RE
Hook Corp. incurred the following start-up costs, all paid in cash:
Prepare Hook’s journal entry to record the start-up costs, all paid in cash.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Solomon Company started year 1 with $270,000 in its cash and common stock accounts. During year 1, Solomon paid $202,500 cash for employee compensation and $62,100 cash for materials.
Required
Determine the total amount of assets and the amount of expense shown on the year 1 financial statements assuming Solomon used the labor and materials to make 1,500 chairs. Further, assume that Solomon sold 1,200 of the chairs it made. State the name(s) of the expense account(s) shown on the income statement.
Determine the total amount of assets and the amount of expense shown on the year 1 financial statements assuming Solomon used the labor and materials to provide dental cleaning services to 500 patients. State the name(s) of the expense account(s) shown on the income statement
Solomon Company started year 2 with $90,000 in its cash and common stock accounts. During year 2 Solomon paid $67,500 cash for employee compensation. Assume this is the only transaction that occurred in year 2.
Required
Determine the total amount of assets at the end of year 2, assuming Solomon is a manufacturing company and the employees were paid to make products.
Determine the amount of expense recognized on the year 2 income statement, assuming Solomon is a manufacturing company and the employees were paid to make products.
Determine the total amount of assets at the end of year 2, assuming Solomon is a service company.
Determine the amount of expense recognized on the year 2 income statement, assuming Solomon is a service company.
Jada Company had the following transactions during the year. If all transactions were recorded properly, determine whether each transaction is capitalized or expensed.
Choose: capitalized or expensed for 1-10.
1. Purchased a machine for $500,000 using a long-term note to finance it. [ Select ]["expensed", "capitalized"]
2. Paid $500 for ordinary repair. [ Select ]["expensed", "capitalized"]
3. Purchased a patent for $45,000 cash. [ Select ]["expensed", "capitalized"]
4. Paid $200,000 cash for addition to an existing building. [ Select ]["expensed", "capitalized"]
5. Paid $60,000 for monthly salaries. [ Select ]["expensed", "capitalized"]
6. Paid $2,500 for routine maintenance on equipment. [ Select ]["expensed", "capitalized"]
7. Paid $10,000 for extraordinary repairs. [ Select ]["expensed", "capitalized"]
8. Paid shipping of $1,000 to get the machine to the business. [ Select ]["expensed", "capitalized"]
9. Paid installation fees for the machine of…
Chapter 12 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 12 - Prob. 1GICh. 12 - Prob. 2GICh. 12 - Prob. 3GICh. 12 - Prob. 4GICh. 12 - Prob. 5GICh. 12 - Prob. 6GICh. 12 - Prob. 7GICh. 12 - What activities are included in RD? Which are...Ch. 12 - What elements of RD activities does a company...Ch. 12 - How does a company record a patent worth 100,000...
Ch. 12 - Prob. 11GICh. 12 - Prob. 12GICh. 12 - Over how many years are patents amortized?...Ch. 12 - Prob. 14GICh. 12 - Prob. 15GICh. 12 - Prob. 16GICh. 12 - Prob. 17GICh. 12 - Prob. 18GICh. 12 - Prob. 19GICh. 12 - Prob. 20GICh. 12 - What is the proper time or time period over which...Ch. 12 - Prob. 2MCCh. 12 - Prob. 3MCCh. 12 - Which of the following assets typically are...Ch. 12 - Prob. 5MCCh. 12 - Prob. 6MCCh. 12 - Prob. 7MCCh. 12 - Prob. 8MCCh. 12 - Prob. 9MCCh. 12 - Prob. 10MCCh. 12 - Steel Magnolia Incorporated purchased a trademark...Ch. 12 - Match the following items with correct accounting...Ch. 12 - Notting Hill Company incurred the following costs...Ch. 12 - Hook Corp. incurred the following start-up costs,...Ch. 12 - Mystic Pizza Company purchased a patent from Prime...Ch. 12 - Mystic Pizza Company purchases a franchise from NY...Ch. 12 - Prob. 7RECh. 12 - Prob. 8RECh. 12 - Prob. 9RECh. 12 - Prob. 10RECh. 12 - Prob. 1ECh. 12 - On January 4, 2019, Franc Company purchased for...Ch. 12 - On January 11, 2019, Hughes Company applied for a...Ch. 12 - Gansac Publishing Company signed a contract with...Ch. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - KLK Clothing Company manufactures professional...Ch. 12 - Cressman Company incurred RD costs for various...Ch. 12 - In 2019, Lalli Corporation incurred RD costs as...Ch. 12 - Kling Company was organized in late 2019 and began...Ch. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Company is considering purchasing EKC Company....Ch. 12 - Prob. 18ECh. 12 - Prob. 19ECh. 12 - Prob. 20ECh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Halpern Companys controller prepared the following...Ch. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Hamilton Companys balance sheet on January 1,...Ch. 12 - Prob. 8PCh. 12 - Lee Manufacturing Corporation was incorporated on...Ch. 12 - Information concerning Tully Corporations...Ch. 12 - Prob. 11PCh. 12 - In examining Samson Manufacturing Companys books,...Ch. 12 - Prob. 2CCh. 12 - Prob. 3CCh. 12 - Prob. 4CCh. 12 - On June 30, 2019, your client, Sprauge...Ch. 12 - Prob. 6CCh. 12 - NBC paid 401 million for the rights to televise...Ch. 12 - Prob. 8C
Additional Business Textbook Solutions
Find more solutions based on key concepts
For each of the following transactions, state which special journal (Sales Journal, Cash Receipts Journal, Cash...
Principles of Accounting Volume 1
Fundamental and Enhancing Characteristics. Identify whether the following items are fundamental characteristics...
Intermediate Accounting
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals of Cost Accounting
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
E6-14 Using accounting vocabulary
Learning Objective 1, 2
Match the accounting terms with the corresponding d...
Horngren's Accounting (11th Edition)
Preparing Financial Statements from a Trial Balance The following accounts are taken from Equilibrium Riding, I...
Fundamentals of Financial Accounting
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
- 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?arrow_forwardJada 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?arrow_forwardThe following amounts were spent on development expenses relating to a new product. Assume the capitalization criteria was met on 1 September 20X3, when financing for the project was secured. Assume all costs were incurred evenly over the period, unless otherwise noted. Description Amount Product development costs (January – August) $ 98,000 Product development costs (September - December) $ 66,000 Employee salaries for development team (January - December) $ 120,000 Brand awareness, and advertising expenses $ 7,900 Interest on loans to finance development (October - December) $ 12,500 Required: Prepare the journal entries to record the above costs.arrow_forward
- The company purchases $2,000,000 of equipment to be used in its manufacturing plant. The company pays the equipment vendor $500,000 up front, and will pay the remaining amount later. For each element of the fundamental accounting equation (A, L, E), indicate whether that element increases, decreases, or ultimately remains unchanged.arrow_forwardBrill Company made the following expenditures during the current year: Costs to develop computer software for internal use in Brill’s general management information system: 1 000 000 Cost of market research activities 750 000 Brill Company’s total Expense?arrow_forwardSinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. Acquired $68,000 cash by issuing common stock. Paid $8,700 for the materials used to make its products, all of which were started and completed during the year. Paid salaries of $4,500 to selling and administrative employees. Paid wages of $10,000 to production workers. Paid $9,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a four-year useful life. Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life. Sold inventory to customers for $35,000 that had cost $14,000 to make. Required How these events…arrow_forward
- Sinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. Acquired $68,000 cash by issuing common stock. Paid $8,700 for the materials used to make its products, all of which were started and completed during the year. Paid salaries of $4,500 to selling and administrative employees. Paid wages of $10,000 to production workers. Paid $9,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a four-year useful life. Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life. Sold inventory to customers for $35,000 that had cost $14,000 to make. Required Indicate how…arrow_forwardFor each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. A) Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000.B)A company records the expenses incurred to generate the revenues reported. C)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. *arrow_forwardCan I please get help and a how to explaination for this practice? Sinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. Acquired $68,000 cash by issuing common stock. Paid $8,700 for the materials used to make its products, all of which were started and completed during the year. Paid salaries of $4,500 to selling and administrative employees. Paid wages of $10,000 to production workers. Paid $9,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a four-year useful life. Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life. Sold inventory to customers for…arrow_forward
- On December 5, 2020, Kara Corp purchased a machinery from a dealer paying P2,310,000 cash. In addition, a P150,000 transaction cost was incurred to bring the machinery in the company’s premises. Using the conceptual framework, how much is the historical cost of the machinery?arrow_forwardThorpe Corporation purchases a new delivery truck and signs a note payable at the truckdealership for the total cost. The impact of this transaction on Thorpe Corporationa. increases assets and decreases stockholders’ equity.b. decreases assets and increases liabilities.c. increases assets and increases liabilities.d. increases assets and increases stockholders’ equity.arrow_forwardIndicate how each of the following transactions would affect Pharoah Ltd's statement of income, statement of financial position, and statement of cash flows. If there would be no effect, then state that. Pharoah sold a piece of equipment for $42,600. The equipment had originally cost $172,000 and had a carrying amount of $49,000 at the time it was sold. b. Pharoah purchased a new piece of equipment to replace the equipment that had been sold. The new equipment had a cost of $234.000. C. Pharoah recorded the annual depreciation on its equipment in the amount of $133,000.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate 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,Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher: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,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License