1. On March 31, 2020, Golden Grain spent $16,000,000 to purchase land that already comes with a building, which the company will use as a warehouse. The land has a fair value of $12,000,000 and the building has a fair value of $8,000,000 on the date of the purchase. The building has a residual value of $2,000,000 and is expected to bring future economic benefits to the company evenly over its expected useful life of 20 years. Because land and building were acquired together as a bulk purchase and because the building is attached to the land, the intern recorded the $16,000,000 purchase simply as a debit to building and credit to cash, 2. On July 1, 2020, the company purchased a patent at a cost of $500,000. The patent has a legal life of 20 years even though its useful life is expected to be only 10 years. The intern recorded the purchase as a debit to patent and credit to cash for $500,000. 3. On November 30, 2020, the building incurred some water damage. The company spent $30,000 to repair the damage. The intern capitalized this cost by debiting building and crediting cash for $30,000. Prepare the journal entry to record the payment of the first installment plus interest on May 31 Date Account Title and Explanation Debit Credit What would be the total note payable balance on May 31, 2021? How much of the loan would be considered current? Total note payable = Current portion= G H 32 h) Prepare the journal entry to record the partner withdrawals of cash at December 31 for SC Consulting. 33 4 Date Account Title and Explanation Debit Credit 5 6 7 8 9 1 2 Be) Prepare a schedule showing the allocation of the net income to the partners of SC Consulting at year end. Razul Amy Sheila Net Income Total $400,000 f) Prepare the journal entries to record the distribution of net income and the closing of the withdrawals accounts. Assume 5 revenues and expenses have been closed to the income summary account. 3 Date Account Title and Explanation Debit Credit g) After dividing the income for the year, all parties agreed to liquidate the partnership. The values of the assets and liabilities shown below. The furniture is sold for $54,000 and all other assets are sold at their given values. Any gains or losses from liquidation are split evenly among all partners. Cash Accounts Receivable Net Equipment Net Furniture Accounts Payable Bank Loan $482,000 50,000 247,000 84,000 36,000 112,000 Prepare the journal entries to sell the assets, distribute any gains or losses to the partners, pay the liabilities and distribute the cash to the partners. 3 Date Account Title and Explanation Debit Credit 3 5 3 1 2 3 4 5 6 7 8 9 0 1
