ACG 2021

1.Borges Distributors purchased waterproofing equipment on January 2^nd, 2011, for $450,000. The equipment was expected to have a useful life of four years, or 10,000 operating hours, and a residual value of $50,000. The equipment was used for 3,000 operating hours during 2011, 4,000 hours in 2012, 2,500 hours in 2013, and 500 hours in 2014.

Determine the amount of depreciation expense for the years ended December 31, 2011, 2012, 2013, and 2014, by (a) the straight-line method,

(b) the units- of-production method, and (c) the double-declining-balance method. Also, determine the total depreciation expense for the four years by each method. (12 points)

YearS-L MethodU of P MethodD-D Bal Method

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2.A machine acquired on January 4, 2009, at a cost of $425,000, has an estimated useful life of nine years and an estimated residual value of $65,000. (10 points)

a.What was the amount of depreciation for the years 2009, 2010, and 2011, using the straight-line method of depreciation?

b.What was the book value of the machine on January 1, 2012?

c.Assume that the machine was sold on January 9, 2012, for $290,000 journalize the entry to record the sale

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d.Assume that the machine had been sold on January 9, for $310,000, journalize the entry to record the sale.

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3.According to records, Borges Distributors, $1,110,000 was subject to 6.0% SS tax and the 1.5% Medicare tax. Also, $50,000 was subject to state and federal unemployment taxes. (10 points)

a.Calculate the employer's payroll taxes, using 4.2% for SUTA, and .8% for FUTA.

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bJournalize the entry to record the payroll taxes

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4.Smith & Co. has 20,000 shares of 1% cumulative preferred stock of $100 par and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends. (10 points)

Year 1 $10,000, Year 2

$45,000,Year 3 $80,000

Determine the dividends per share for preferred and common stock for each year.

Year 1Year 2Year 3

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