A-1

Trinkle Company, Incorporated made several purchases of long-term assets in Year 1. The details of each purchase are presented here.

New Office Equipment

1. List price: $36,100; terms: 2/10 n/30; paid within discount period.
2. Transportation-in: $740.
3. Installation: $580.
4. Cost to repair damage during unloading: $615.
5. Routine maintenance cost after six months: $260.

Basket Purchase of Copier, Computer, and Scanner for $51,900 with Fair Market Values

1. Copier, $22,500.
2. Computer, $11,250.
3. Scanner, $28,750.

Land for New Warehouse with an Old Building Torn Down

1. Purchase price, $75,700.
2. Demolition of building, $5,070.
3. Lumber sold from old building, $1,090.
4. Grading in preparation for new building, $8,000

Construction of New Building

1. Construction of new building, $231,000

Required In case of office equipment, determine the amount of cost to be capitalized in the asset accounts.

In case of basket purchase, determine the amount of cost to be capitalized in the asset accounts.

In case of land, determine the amount of cost to be capitalized in the asset accounts.

In case of new building, determine the amount of cost to be capitalized in the asset accounts.

A-2

[The following information applies to the questions displayed below.] At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $300,000. It is expected to have a five-year life and a $40,000 salvage value

c. Prepare the journal entries to recognize depreciation for each of the five years, assuming that the company uses: (1) Straight-line depreciation. (2) Double-declining-balance depreciation.

Prepare the journal entries to recognize depreciation for each of the five years, assuming that the company uses straight-line depreciation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field

C-1

Record depreciation expense.

C-2

Record depreciation expense for year 1.

Record depreciation expense for year 2

Record depreciation expense for year 3.

Record depreciation expense for year 4

Record depreciation expense for year 5.