GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Chapter 8, Problem 8.3P
1.
To determine
Ascertain the cost of Machines A, B and C.
2.
To determine
Prepare the
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Depreciation Choices and Outcome.Mulligan Co. purchased a new machine on January 1. The following information pertains to the purchase:
Life of asset
5 years
Salvage value
$3,000
Purchase price
18,000
Sales tax
1,000
Freight cost
800
Electrical set-up
700
Custom programming
500
Estimated annual labor savings
3,500
Additional revenue generated
8,000
a. Determine the capitalized cost of the new machine$Answerb. Compute annual depreciation, accumulated depreciation and the machine's book value for the first three year assuming:i. Straight-line depreciationii. Double-declining-balance method
Straight-Line Depreciation
Double-Declining Balance
DepreciationExpense
AccumulatedDepreciation
Book Value atYear-end
DepreciationExpense
AccumulatedDepreciation
Book Value atYear-End
Year 1
Year 2
Year 3
c. Assume the machine is sold for $8,000 at the end of the third year after depreciation…
Title
Prepare journal entries for each of the following transactions or events for Liu Cybersystems:
Description
Journal entries for depreciation and amortization expense
Prepare journal entries for each of the following transactions or events for Liu Cybersystems:
(a) Acquired computers costing $800 000 and software costing $80 000 on 1 January 2011. Liu expects the computers to have a service life of 10 years and $80 000 residual value. The software is expected to have a service life of four years and zero residual value.
(b) Paid $40 000 to install the computers at Liu’s office. Paid $20 000 to test the software.
(c) Liu records depreciation and amortization expense for the computers and the computer software using the straight-line method for 2011 and 2012.
Santa Rosa recentiy purchased a new boat to help ship product overseas. The following information is related to that purchase:
Purchase price $4,100,000
Cost to bring boat to production facility $29,000
Yearly insurance cost $29,000
Annual maintenance cost of $40,000
Received 6% discount on sales price
A. Determine the acquisition cost of the boat.
$
4,375,000 X
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Remember that any costs incurred in the process of acquiring an asset and making it ready for its intended use can be capitalized as part of the value of the
asset. Any other costs that maintain the asset during its use are standard expenses (not capitalized).
B. Record the journal entry needed. If an amount box does not require an entry, leave it blank.
Вoat
4,375,000
X
Cash
4,375,000 X
Chapter 8 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 8 - Define long-lived assets. Why are they considered...Ch. 8 - Prob. 2QCh. 8 - What are the classifications of long-lived assets?...Ch. 8 - Prob. 4QCh. 8 - Describe the relationship between the expense...Ch. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - In computing depreciation, three values must be...Ch. 8 - The estimated useful life and residual value of a...Ch. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - Why is depreciation expense added to net income...Ch. 8 - Miga Company and Porter Company both bought a new...Ch. 8 - Leslie, Inc.. followed the practice of...Ch. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQCh. 8 - Prob. 9MCQCh. 8 - (Chapter Supplement) Irish Industries purchased a...Ch. 8 - Prob. 8.1MECh. 8 - Prob. 8.2MECh. 8 - Prob. 8.3MECh. 8 - Prob. 8.4MECh. 8 - Computing Book Value (Double-Declining-Balance...Ch. 8 - Computing Book Value (Units-of-Production...Ch. 8 - Identifying Asset Impairment LO8-4 For each of the...Ch. 8 - Prob. 8.8MECh. 8 - Prob. 8.9MECh. 8 - Prob. 8.10MECh. 8 - Prob. 8.1ECh. 8 - Prob. 8.2ECh. 8 - Computing and Recording Cost and Depreciation of...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Recording Depreciation and Repairs (Straight-Line...Ch. 8 - Prob. 8.7ECh. 8 - Prob. 8.8ECh. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Prob. 8.11ECh. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Computing Depreciation and Book Value for Two...Ch. 8 - Prob. 8.15ECh. 8 - Recording the Disposal of an Asset at Three...Ch. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.22ECh. 8 - (Chapter Supplement) Recording a Change in...Ch. 8 - Prob. 8.24ECh. 8 - Prob. 8.25ECh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Analyzing the Effects of Repairs, an Addition, and...Ch. 8 - Prob. 8.3PCh. 8 - Best Buy Co., Inc., headquartered in Richfield,...Ch. 8 - Evaluating the Effect of Alternative Depreciation...Ch. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Computing Goodwill from the Purchase of a Business...Ch. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Prob. 8.2APCh. 8 - Computing the Acquisition Cost and Recording...Ch. 8 - Prob. 8.4APCh. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.6APCh. 8 - Prob. 8.7APCh. 8 - Asset Acquisition, Depreciation, and Disposal Pool...Ch. 8 - Case A. Dr Pepper Snapple Croup, Inc., is a...Ch. 8 - Prob. 8.1BCOMPCh. 8 - Prob. 8.1CCOMPCh. 8 - Case D. Stewart Company reports the following...Ch. 8 - Case E. Matson Company purchased the following on...Ch. 8 - Prob. 8.1CPCh. 8 - Finding Financial Information LO8-1, 8-2, 8-6...Ch. 8 - Comparing Companies within an Industry Refer to...Ch. 8 - Prob. 8.4CPCh. 8 - Prob. 8.5CPCh. 8 - Prob. 8.6CPCh. 8 - Evaluating the Impact of Capitalized Interest on...
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