Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)
5th Edition
ISBN: 9780134833170
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 8, Problem 20AE
To determine
Record the purchase of the three tanning beds.
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(Learning Objectives 1, 3, 8: Report plant assets, depreciation, and investing cashflows) On January 1, 2018, Little City Bar & Grill purchased a building, paying $58,000 cashand signing a $110,000 note payable. The company paid another $62,000 to remodel thebuilding. Furniture and fixtures cost $55,000, and dishes and supplies—a current asset—wereobtained for $9,400. All expenditures were for cash. Assume that all of these expendituresoccurred on January 1, 2018.Little City is depreciating the building over 25 years using the straight-line method, with anestimated residual value of $51,000. The furniture and fixtures will be replaced at the end of fiveyears and are being depreciated using the double-declining-balance method, with a residual valueof zero. At the end of the first year, the company still had dishes and supplies worth $1,300.Show what the company reported for supplies, plant assets, and cash flows at the end of thefirst year on its■ income statement,■ balance sheet,…
E7-22A. (Learning Objective 1: Measure the cost of plant assets) Murphy Self Storagepurchased land, paying $160,000 cash as a down payment and signing a $185,000 note payablefor the balance. Murphy also had to pay delinquent property tax of $2,000, title insurance costing$6,000, and $11,000 to level the land and remove an unwanted building. The company paid$58,000 to add soil for the foundation and then constructed an office building at a cost of $700,000.It also paid $52,000 for a fence around the property, $11,000 for the company sign near theproperty entrance, and $3,000 for lighting of the grounds. What is the capitalized cost of eachof Murphy’s land, land improvements, and building?
(Learning Objective 5: Record natural resource assets and depletion) MineralMines paid $425,000 for the right to extract ore from a 250,000-ton mineral deposit. In additionto the purchase price, Mineral Mines paid a $110 filing fee to the country recorder, a $2,000license fee to the state of Colorado, and $55,390 for a geologic survey. Because the companypurchased the rights to the minerals only, it expects this mineral rights asset to have a residualvalue of zero when it is fully depleted. During the first year of production, Mineral Minesremoved 35,000 tons of ore, of which it sold 29,000 tons. Make journal entries to record (a)purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-yearproduction, and (d) cost of the ore sold. Round depletion per unit to the closest cent
Chapter 8 Solutions
Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - What is depreciation, and why is it used in...Ch. 8 - Prob. 5DQCh. 8 - Which depreciation method would be moot...Ch. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 1SCCh. 8 - Prob. 2SCCh. 8 - How should a capital expenditure for a long-term...Ch. 8 - Which depreciation method usually produces the...Ch. 8 - Prob. 5SCCh. 8 - Prob. 6SCCh. 8 - Prob. 7SCCh. 8 - Prob. 8SCCh. 8 - Prob. 9SCCh. 8 - Prob. 10SCCh. 8 - Prob. 11SCCh. 8 - Prob. 12SCCh. 8 - Prob. 1SECh. 8 - Long-term asset terms (Learning Objective 1) 5-10...Ch. 8 - Prob. 3SECh. 8 - Lump-sum purchase (Learning Objective 2) 5-10 min....Ch. 8 - Errors in accounting for long-term assets...Ch. 8 - Concept of depreciation (Learning Objective 3)...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Prob. 9SECh. 8 - Prob. 10SECh. 8 - Prob. 11SECh. 8 - Prob. 12SECh. 8 - Prob. 13SECh. 8 - Prob. 14SECh. 8 - Prob. 15SECh. 8 - Other long term assets (Learning Objective 8) 5-10...Ch. 8 - Prob. 17SECh. 8 - Prob. 18AECh. 8 - Prob. 19AECh. 8 - Prob. 20AECh. 8 - Prob. 21AECh. 8 - Depreciation methods (Learning Objective 3) 15-20...Ch. 8 - Prob. 23AECh. 8 - Prob. 24AECh. 8 - Prob. 25AECh. 8 - Prob. 26AECh. 8 - Prob. 27AECh. 8 - Prob. 28AECh. 8 - Prob. 29AECh. 8 - Prob. 30AECh. 8 - Prob. 31AECh. 8 - Prob. 32BECh. 8 - Prob. 33BECh. 8 - Prob. 34BECh. 8 - Prob. 35BECh. 8 - Prob. 36BECh. 8 - Prob. 37BECh. 8 - Prob. 38BECh. 8 - Prob. 39BECh. 8 - Prob. 40BECh. 8 - Prob. 41BECh. 8 - Prob. 42BECh. 8 - Prob. 43BECh. 8 - Prob. 44BECh. 8 - Prob. 45BECh. 8 - Long-term asset costs and partial-year...Ch. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 48APCh. 8 - Prob. 49APCh. 8 - Prob. 50APCh. 8 - Prob. 51APCh. 8 - Prob. 52APCh. 8 - Prob. 53BPCh. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 55BPCh. 8 - Prob. 56BPCh. 8 - Prob. 57BPCh. 8 - Prob. 58BPCh. 8 - Prob. 59BPCh. 8 - Prob. 1CECh. 8 - Prob. 1CPCh. 8 - Continuing Financial Statement Analysis Problem...Ch. 8 - Prob. 1EIACh. 8 - Prob. 2EIACh. 8 - Financial Analysis Purpose: To help familiarize...Ch. 8 - Prob. 1IACh. 8 - Prob. 1SBACh. 8 - Written Communication A client of yours notified...
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- (Learning Objectives 1, 3: Measure, depreciate, and report plant assets) During2018, Ming’s Book Store paid $486,000 for land and built a store in Naperville, Illinois.Prior to construction, the city of Naperville charged Ming’s $1,000 for a building permit,which Ming’s paid. Ming’s also paid $15,000 for architect’s fees. The construction cost of$670,000 was financed by a long-term note payable, with interest costs of $28,020 paid atthe completion of the project. The building was completed June 30, 2018. Ming’s depreciatesthe building using the straight-line method over 35 years, with estimated residual value of$330,000.1. Journalize transactions for the following (explanations are not required):a. Purchase of the landb. All the costs chargeable to the building in a single entryc. Depreciation on the building for 20182. Report Ming’s plant assets on the company’s balance sheet at December 31, 2018.3. What will Ming’s income statement for the year ended December 31, 2018, report for…arrow_forwardOrion Flour Mills purchased a new machine and made the following expenditures: Purchase price $ 75,000 Sales tax 6,000 Shipment of machine 1,000 Insurance on the machine for the first year 700 Installation of machine 2,000 The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Record the above expenditures for the new machine.arrow_forward(Learning Objective 5: Record natural resource assets and depletion) BearcreekMines paid $433,000 for the right to extract ore from a 450,000-ton mineral deposit. In addition to the purchase price, Bearcreek Mines paid a $155 filing fee to the county recorder, a$2,800 license fee to the state of Utah, and $95,045 for a geologic survey. Because the companypurchased the rights to the minerals only, it expects this mineral rights asset to have a residualvalue of zero when it is fully depleted. During the first year of production, Bearcreek Minesremoved 75,000 tons of ore, of which it sold 72,000 tons. Make journal entries to record (a)purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-yearproduction, and (d) cost of the ore sold. Round depletion per unit to the closest cent.arrow_forward
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