The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during
Question:
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.
Required:
Give the journal entries required on each of the above dates.
2018 January 2 Paid $95,000 cash to purchase storage shed components. January 3 Paid $5,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $10,000. Paid $38,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $8,000. April 1 May 13 Paid $250 cash for minor repairs to the pickup truck's upholstery. Paid $20,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remain- ing useful life of five years. July 1 December 31 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. 2019 Sold the pickup truck for $33,000 cash. (Record the depreciation on the truck prior to recording its disposal.) June 30 December 31 Recorded depreciation on the storage shed. Also determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero).
Step by Step Answer:
Req 1 Req2 Req3 Req 4 Web Wizard would report Bad Debt Expense before ...View the full answer
Fundamentals Of Financial Accounting
ISBN: 9781265440169
7th Edition
Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
Students also viewed these Business questions
-
The following transactions and adjusting entries were completed by a paper- packaging company called Gravure Graphics International during 2015 and 2016. The company uses straight- line depreciation...
-
The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The company uses straight-line depreciation for delivery vehicles, double...
-
The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The company uses straight- line depreciation for delivery vehicles, double-declining-...
-
A company that makes cola drinks states that the mean caffeine content per 12-ounce bottle of cola is 50 milligrams. You want to test this claim. During your tests, you find that a random sample of...
-
You dive 5 m down in the ocean. What is the absolute pressure there?
-
When a business asks a customer to sign a note receivable for an extension of time on the customer's account receivable, how do the amount and form of the business asset change?
-
The following information relates to Menlo, Inc.: a. Calculate the company's return on common stockholders' equity for 2018 and 2019. b. Calculate the company's dividend yield for 2018 and 2019. c....
-
The Nolan Corporation finds it is necessary to determine its marginal cost of capital. Nolans current capital structure calls for 50 percent debt, 30 percent preferred stock, and 20 percent common...
-
Market value of securities held in the portfolio Liabilities of the fund Shares outstanding = $5.7 billion = $186 million = 283 million
-
Bart James, a partner in the CPA firm of James and Day, received the following memorandum from John Gray, president of Gray Manufacturing Corporation, an audit client of many years. Dear Bart: I have...
-
This case is based on a cost capitalization fraud at WorldCom. The case is available online in the Connect eBook. To complete this case, you will identify information that suggests certain costs are...
-
Wiater Company operates a small manufacturing facility. On January 1, 2018, an asset account for the company showed the following balances: During the first week of January 2018, the following...
-
What method takes a list argument and writes it to a CSV file?
-
Measuring GDP (6pts): A simple economy has four industries: The agricultural industry sells $45 million in food products directly to households as well as $35 million to the steel industry, which...
-
Ratliff Appliances Company makes a household appliance with model number RM16. The goal for 2020 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing...
-
Sweet Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $1,800 May 5: Received and paid electricity bill, $120 May 9: Received cash for...
-
The purpose of this reflection assignment is to use the experience of working in your group to explain some of the group concepts examined this week. Instructions Using the information from your...
-
What are some issues facing developing nations? What kind of assistance is the United States providing to developing nations? What is your assessment of the effectiveness of these actions? Should the...
-
Laceby manufactures agricultural equipment and is currently all-equity financed. In previous years, it has paid out a steady 50 per cent of available earnings as dividend and used retentions to...
-
What is a manufacturing system?
-
Sell Amazon.com reported the following amounts in its financial statements (in millions): Required: 1. Determine the inventory turnover ratio and average days to sell inventory for 2012 and 2011....
-
Using the information in PB7-1, calculate the cost of goods sold and ending inventory for Mojo Industries assuming it applies the LIFO cost method perpetually at the time of each sale. Com-pare these...
-
Spears & Cantrell announced inventory had been overstated by $ 30 at the end of its second quarter. The error wasnt discovered and corrected in the companys periodic inventory system until after the...
-
One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $160,000...
-
At the annual family barbeque, your Uncle John told you that he deposited $50,000 in a bank account. At that time, the Consumer Price Index (CPI) was 300. A year later, the balance in Uncle John's...
-
Andrea is a single child under 18 with $3,500 of interest income and no earned income. What is Andrea's net unearned income? a. $2,250 b. $1,750 c. $3,500 d. $1,000
Study smarter with the SolutionInn App