Assistance in Completing my Unit 7 Assignment. Please see attached.
Wiley Assignment Unit 7 Exercise 116 Agazzi Company purchased equipment for $361,150 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $34,720. Estimated production is 40,300 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 560 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Agazzi is on a calendaryear basis ending December 31. (a) (b) Straightline method for 2012 (Round answer to 0 decimal places, e.g. $45,892.) $ Activity method (units of output) for 2012 (Round rate per unit to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) $ (c) Activity method (working hours) for 2012 (Round rate per hour to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) $ (d) Sumoftheyears'digits method for 2014 (Round answer to 0 decimal places, e.g. $45,892.) Doubledecliningbalance method for 2013 (Round answer to 0 decimal places, e.g. $ $ (e) $45,892.) Brief Exercise 135 Sport Pro Magazine sold 28,320 annual subscriptions on August 1, 2012, for $25 each. Prepare Sport Pro's (a) August 1, 2012, journal entry and (b) the December 31, 2012, annual adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date (a) Debit Credit 8/1/12 (b) Account Titles and Explanation 12/31/12 Brief Exercise 137 Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Exercise 133 On December 31, 2012, Alexander Company had $1,296,800 of shortterm debt in the form of notes payable due February 2, 2013. On January 21, 2013, the company issued 24,770 shares of its common stock for $43 per share, receiving $1,065,110 proceeds after brokerage fees and other costs of issuance. On February 2, 2013, the proceeds from the stock sale, supplemented by an additional $231,690 cash, are used to liquidate the $1,296,800 debt. The December 31, 2012, balance sheet is issued on February 23, 2013. Show how the $1,296,800 of shortterm debt should be presented on the December 31, 2012, balance sheet. ALEXANDER COMPANY Partial Balance Sheet December 31, 2012 $ Exercise 1311 Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. (To record the sale) 2. (To record the warranty expense) 3. (To record the warranty liabilitiy) (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) 2. (To record the warranty expense) 3. Debit Credit Wiley Assignment Unit 7 Exercise 116 Agazzi Company purchased equipment for $361,150 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $34,720. Estimated production is 40,300 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 560 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Agazzi is on a calendaryear basis ending December 31. (a) Straightline method for 2012 (Round answer to 0 decimal places, e.g. $45,892.) (b) Activity method (units of output) for 2012 (Round rate per unit to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Activity method (working hours) for 2012 (Round rate per hour to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Sumoftheyears'digits method for 2014 (Round answer to 0 decimal places, e.g. $45,892.) Doubledecliningbalance method for 2013 (Round answer to 0 decimal places, e.g. $45,892.) (c) (d) (e) Workings: (a) Straight line depreciation per year = [Cost - Salvage value]/Estimated life [361,150 - 34,720]/8 years 40803.75 per year For 3 months period from Oct 1 till Dec 31, 2012 40803.75*3/12 10,201 (b) Depreciation per unit of output = (Cost - Estimated salvage)/Estimated production in units (361,15034,720)/40,300 units $8.10 per unit of output For 1000 units in 2012 = $8.10*1000 $8,100 (c) Depreciation per working hour = (Cost - Estimated salvage)/Estimated working hours (361,15034,720)/20,900 hours $15.62 per hour For 560 hours in 2012 = $15.62*560 $8,747 (d) Sum of the years' digits = 1+2+3+4+5+6+7+8 36 Depreciation = Years remaining in asset's useful life/Sum of the years' digits x Depreciable cost Depreciable cost = 361,150 - 34,720 $326,430 $ $ $ $ $ As of beginning of 2014, the remaining useful life is 6.75 years (because 2012 had 0.25 years and 2013 had 1 full year: 8 years - 0.25 - 1 = 6.75) Depreciation for 2014 = $326,430*6.75/36 61,206 (e) Doubledeclining rate = 1/8 years x 200% = 25% Depreciation = Beginning of the year book value x Double declining rate For 2012: 361,150*25%*3/12 22,571.88 For 2013: (361,15022,571.88)*25% 84,645 Brief Exercise 135 Sport Pro Magazine sold 28,320 annual subscriptions on August 1, 2012, for $25 each. Prepare Sport Pro's (a) August 1, 2012, journal entry and (b) the December 31, 2012, annual adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date (a) Debit Credit 8/1/12 (b) Account Titles and Explanation 12/31/12 Workings: (a) Cash is debited for 28,320*$25 $708,000 Note: The credit is for \"Unearned revenue\". There are no options given via drop down menus. The best fit title is this and sometimes you may find the title in another name with same meaning. Let me know if you have a doubt. (b) Revenue is earned for 5 months when the subscription paid earlier was for 12 months. Therefore, subscription revenue = $708,000*5/12 295,000 Brief Exercise 137 Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Cash Credit 22,100 (please note: this is additional credit) Please note: There should have been 6 total columns but only 5 are given. Hence, I have entered cash below. The actual journal entry should look like this: Account titles and explanation Debit Credit Wages expense 28,280 Federal withholding taxes payable 3,090 Incorrect FICA taxes payable State withholding taxes payable 1,710 incorrect title 1,150 Incorrect Insurance premium payable 230 Cash (28280309017101150230) 22,100 Exercise 133 On December 31, 2012, Alexander Company had $1,296,800 of shortterm debt in the form of notes payable due February 2, 2013. On January 21, 2013, the company issued 24,770 shares of its common stock for $43 per share, receiving $1,065,110 proceeds after brokerage fees and other costs of issuance. On February 2, 2013, the proceeds from the stock sale, supplemented by an additional $231,690 cash, are used to liquidate the $1,296,800 debt. The December 31, 2012, balance sheet is issued on February 23, 2013. Show how the $1,296,800 of shortterm debt should be presented on the December 31, 2012, balance sheet. ALEXANDER COMPANY Partial Balance Sheet December 31, 2012 $ Total liabilities 1,296,800 Please note: The above table should have had another row for total liabilities. Since it is not given, I have mentioned it below. The partial balance sheet will actually appear like the one shown below: Partial balance sheet: Current liabilities: Notes payable 231,690 Longterm debt Notes payable refinanced Total liabilities 1,065,110 1,296,800 When the company expects to refinance as on the balance sheet date, we have to exclude the shortterm obligations from the current liabilities and show it as longterm debt. Exercise 1311 Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) Debit Credit 2. wrong (To record the warranty expense) 3. (To record the warranty liabilitiy) Workings: Sales = 599*$6,600 each 3,953,400 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. wrong (To record the sale) 2. (To record the warranty expense) 3. Workings: In the 1st journal entry, sales = 3,953,400 - 179,400 3,774,000 3rd journal entry: Warranty revenue 17,200/172,000 * 179,400 17,940 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. Wiley Assignment Unit 7 Exercise 116 Agazzi Company purchased equipment for $361,150 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $34,720. Estimated production is 40,300 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 560 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Agazzi is on a calendaryear basis ending December 31. (a) Straightline method for 2012 (Round answer to 0 decimal places, e.g. $45,892.) (b) Activity method (units of output) for 2012 (Round rate per unit to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Activity method (working hours) for 2012 (Round rate per hour to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Sumoftheyears'digits method for 2014 (Round answer to 0 decimal places, e.g. $45,892.) Doubledecliningbalance method for 2013 (Round answer to 0 decimal places, e.g. $45,892.) (c) (d) (e) Workings: (a) Straight line depreciation per year = [Cost - Salvage value]/Estimated life [361,150 - 34,720]/8 years 40803.75 per year For 3 months period from Oct 1 till Dec 31, 2012 40803.75*3/12 10,201 (b) Depreciation per unit of output = (Cost - Estimated salvage)/Estimated production in units (361,15034,720)/40,300 units $8.10 per unit of output For 1000 units in 2012 = $8.10*1000 $8,100 (c) Depreciation per working hour = (Cost - Estimated salvage)/Estimated working hours (361,15034,720)/20,900 hours $15.62 per hour For 560 hours in 2012 = $15.62*560 $8,747 (d) Sum of the years' digits = 1+2+3+4+5+6+7+8 36 Depreciation = Years remaining in asset's useful life/Sum of the years' digits x Depreciable cost Depreciable cost = 361,150 - 34,720 $326,430 $ $ $ $ $ As of beginning of 2014, the remaining useful life is 6.75 years (because 2012 had 0.25 years and 2013 had 1 full year: 8 years - 0.25 - 1 = 6.75) Depreciation for 2014 = $326,430*6.75/36 61,206 (e) Doubledeclining rate = 1/8 years x 200% = 25% Depreciation = Beginning of the year book value x Double declining rate For 2012: 361,150*25%*3/12 22,571.88 For 2013: (361,15022,571.88)*25% 84,645 Brief Exercise 135 Sport Pro Magazine sold 28,320 annual subscriptions on August 1, 2012, for $25 each. Prepare Sport Pro's (a) August 1, 2012, journal entry and (b) the December 31, 2012, annual adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date (a) Debit Credit 8/1/12 (b) Account Titles and Explanation 12/31/12 Workings: (a) Cash is debited for 28,320*$25 $708,000 Note: The credit is for \"Unearned revenue\". There are no options given via drop down menus. The best fit title is this and sometimes you may find the title in another name with same meaning. Let me know if you have a doubt. (b) Revenue is earned for 5 months when the subscription paid earlier was for 12 months. Therefore, subscription revenue = $708,000*5/12 295,000 Brief Exercise 137 Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Cash Credit 22,100 (please note: this is additional credit) Please note: There should have been 6 total columns but only 5 are given. Hence, I have entered cash below. The actual journal entry should look like this: Account titles and explanation Debit Credit Wages expense 28,280 Federal withholding taxes payable 3,090 Incorrect FICA taxes payable State withholding taxes payable 1,710 incorrect title 1,150 Incorrect Insurance premium payable 230 Cash (28280309017101150230) 22,100 Exercise 133 On December 31, 2012, Alexander Company had $1,296,800 of shortterm debt in the form of notes payable due February 2, 2013. On January 21, 2013, the company issued 24,770 shares of its common stock for $43 per share, receiving $1,065,110 proceeds after brokerage fees and other costs of issuance. On February 2, 2013, the proceeds from the stock sale, supplemented by an additional $231,690 cash, are used to liquidate the $1,296,800 debt. The December 31, 2012, balance sheet is issued on February 23, 2013. Show how the $1,296,800 of shortterm debt should be presented on the December 31, 2012, balance sheet. ALEXANDER COMPANY Partial Balance Sheet December 31, 2012 $ Total liabilities 1,296,800 Please note: The above table should have had another row for total liabilities. Since it is not given, I have mentioned it below. The partial balance sheet will actually appear like the one shown below: Partial balance sheet: Current liabilities: Notes payable 231,690 Longterm debt Notes payable refinanced Total liabilities 1,065,110 1,296,800 When the company expects to refinance as on the balance sheet date, we have to exclude the shortterm obligations from the current liabilities and show it as longterm debt. Exercise 1311 Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) Debit Credit 2. wrong (To record the warranty expense) 3. (To record the warranty liabilitiy) Workings: Sales = 599*$6,600 each 3,953,400 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. wrong (To record the sale) 2. (To record the warranty expense) 3. Workings: In the 1st journal entry, sales = 3,953,400 - 179,400 3,774,000 3rd journal entry: Warranty revenue 17,200/172,000 * 179,400 17,940 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. Brief Exercise 137 Your answer is partially correct. Try again. Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Exercise 1311 Your answer is partially correct. Try again. Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) 2. (To record the warranty expense) 3. Debit Credit (To record the warranty liabilitiy) (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) 2. (To record the warranty expense) 3. Notes Payable Sales Revenue Sales Taxes Payable Interest Expense Interest Payable Salaries and Wages Expenses Salaries and Wages Payable Purchases SUTA Taxes Payable FICA Taxes Pyable Union Dues Payable Unearned Sales Revenue Discount on Notes Payable Withholding Taxes Payable Purchases Returns and Allowances Debit Credit Warranty Expense Warranty Liability Warranty Revenue Unearned Warranty Revenue Brief Exercise 137 Your answer is partially correct. Try again. Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Solution: Salaries and Wages expense 28,280 Withholding taxes payable (Federal) 3,090 FICA taxes payable 1,710 SUTA taxes payable 1,150 Insurance Premium payable 230 Salaries and Wages payable (28280-3090-1710-1150-230) 22,100 Dear student, I have entered the amounts given in the question only. It is still highlighting and hence you need to check with your instructor regarding this. Also, there is one more row that is required in the last and is missing. So, I highly doubt there is an error in the system itself. I have updated the titles as per the given options by you. Kindly check with your instructor. Exercise 1311 Your answer is partially correct. Try again. Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. (To record the sale) 2. (To record the warranty expense) 3. (To record the warranty liabilitiy) Solution: 2. Warranty liability 17,200 Inventory 17,200 [Note: Warranty liability and estimated liability for warranty are synonyms. Please note that you have entered as \"Warranty revenue\" in the box and hence showing as incorrect, when I have given it as \"Estimated liability for warranty\". 3. Warranty expense Warranty liability 172,000 172,000 [Please note that you have entered the amount as 17,200 when I have given it as 172,000 and hence showing as incorrect] (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. (To record the sale) 2. (To record the warranty expense) 3. Solution: 1. Cash Sales revenue Unearned warranty revenue 3,953,400 3,774,000 179,400 [Please note: I had correctly given as \"Unearned warranty revenue\" but you have entered it as \"Warranty liability\" and hence showing as incorrect.] Notes Payable Sales Revenue Sales Taxes Payable Interest Expense Interest Payable Salaries and Wages Expenses Salaries and Wages Payable Purchases SUTA Taxes Payable FICA Taxes Payable Union Dues Payable Unearned Sales Revenue Discount on Notes Payable Withholding Taxes Payable Purchases Returns and Allowances Warranty Expense Warranty Liability Warranty Revenue Unearned Warranty Revenue Wiley Assignment Unit 7 Exercise 116 Agazzi Company purchased equipment for $361,150 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $34,720. Estimated production is 40,300 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 560 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Agazzi is on a calendaryear basis ending December 31. (a) Straightline method for 2012 (Round answer to 0 decimal places, e.g. $45,892.) (b) Activity method (units of output) for 2012 (Round rate per unit to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Activity method (working hours) for 2012 (Round rate per hour to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Sumoftheyears'digits method for 2014 (Round answer to 0 decimal places, e.g. $45,892.) Doubledecliningbalance method for 2013 (Round answer to 0 decimal places, e.g. $45,892.) (c) (d) (e) Workings: (a) Straight line depreciation per year = [Cost - Salvage value]/Estimated life [361,150 - 34,720]/8 years 40803.75 per year For 3 months period from Oct 1 till Dec 31, 2012 40803.75*3/12 10,201 (b) Depreciation per unit of output = (Cost - Estimated salvage)/Estimated production in units (361,15034,720)/40,300 units $8.10 per unit of output For 1000 units in 2012 = $8.10*1000 $8,100 (c) Depreciation per working hour = (Cost - Estimated salvage)/Estimated working hours (361,15034,720)/20,900 hours $15.62 per hour For 560 hours in 2012 = $15.62*560 $8,747 (d) Sum of the years' digits = 1+2+3+4+5+6+7+8 36 Depreciation = Years remaining in asset's useful life/Sum of the years' digits x Depreciable cost Depreciable cost = 361,150 - 34,720 $326,430 $ $ $ $ $ As of beginning of 2014, the remaining useful life is 6.75 years (because 2012 had 0.25 years and 2013 had 1 full year: 8 years - 0.25 - 1 = 6.75) Depreciation for 2014 = $326,430*6.75/36 61,206 (e) Doubledeclining rate = 1/8 years x 200% = 25% Depreciation = Beginning of the year book value x Double declining rate For 2012: 361,150*25%*3/12 22,571.88 For 2013: (361,15022,571.88)*25% 84,645 Brief Exercise 135 Sport Pro Magazine sold 28,320 annual subscriptions on August 1, 2012, for $25 each. Prepare Sport Pro's (a) August 1, 2012, journal entry and (b) the December 31, 2012, annual adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date (a) Debit Credit 8/1/12 (b) Account Titles and Explanation 12/31/12 Workings: (a) Cash is debited for 28,320*$25 $708,000 Note: The credit is for \"Unearned revenue\". There are no options given via drop down menus. The best fit title is this and sometimes you may find the title in another name with same meaning. Let me know if you have a doubt. (b) Revenue is earned for 5 months when the subscription paid earlier was for 12 months. Therefore, subscription revenue = $708,000*5/12 295,000 Brief Exercise 137 Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Cash Credit 22,100 (please note: this is additional credit) Please note: There should have been 6 total columns but only 5 are given. Hence, I have entered cash below. The actual journal entry should look like this: Account titles and explanation Debit Credit Wages expense 28,280 Federal withholding taxes payable 3,090 Incorrect FICA taxes payable State withholding taxes payable 1,710 incorrect title 1,150 Incorrect Insurance premium payable 230 Cash (28280309017101150230) 22,100 Exercise 133 On December 31, 2012, Alexander Company had $1,296,800 of shortterm debt in the form of notes payable due February 2, 2013. On January 21, 2013, the company issued 24,770 shares of its common stock for $43 per share, receiving $1,065,110 proceeds after brokerage fees and other costs of issuance. On February 2, 2013, the proceeds from the stock sale, supplemented by an additional $231,690 cash, are used to liquidate the $1,296,800 debt. The December 31, 2012, balance sheet is issued on February 23, 2013. Show how the $1,296,800 of shortterm debt should be presented on the December 31, 2012, balance sheet. ALEXANDER COMPANY Partial Balance Sheet December 31, 2012 $ Total liabilities 1,296,800 Please note: The above table should have had another row for total liabilities. Since it is not given, I have mentioned it below. The partial balance sheet will actually appear like the one shown below: Partial balance sheet: Current liabilities: Notes payable 231,690 Longterm debt Notes payable refinanced Total liabilities 1,065,110 1,296,800 When the company expects to refinance as on the balance sheet date, we have to exclude the shortterm obligations from the current liabilities and show it as longterm debt. Exercise 1311 Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) Debit Credit 2. wrong (To record the warranty expense) 3. (To record the warranty liabilitiy) Workings: Sales = 599*$6,600 each 3,953,400 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. wrong (To record the sale) 2. (To record the warranty expense) 3. Workings: In the 1st journal entry, sales = 3,953,400 - 179,400 3,774,000 3rd journal entry: Warranty revenue 17,200/172,000 * 179,400 17,940 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. Wiley Assignment Unit 7 Exercise 116 Agazzi Company purchased equipment for $361,150 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $34,720. Estimated production is 40,300 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 560 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Agazzi is on a calendaryear basis ending December 31. (a) Straightline method for 2012 (Round answer to 0 decimal places, e.g. $45,892.) (b) Activity method (units of output) for 2012 (Round rate per unit to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Activity method (working hours) for 2012 (Round rate per hour to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) Sumoftheyears'digits method for 2014 (Round answer to 0 decimal places, e.g. $45,892.) Doubledecliningbalance method for 2013 (Round answer to 0 decimal places, e.g. $45,892.) (c) (d) (e) Workings: (a) Straight line depreciation per year = [Cost - Salvage value]/Estimated life [361,150 - 34,720]/8 years 40803.75 per year For 3 months period from Oct 1 till Dec 31, 2012 40803.75*3/12 10,201 (b) Depreciation per unit of output = (Cost - Estimated salvage)/Estimated production in units (361,15034,720)/40,300 units $8.10 per unit of output For 1000 units in 2012 = $8.10*1000 $8,100 (c) Depreciation per working hour = (Cost - Estimated salvage)/Estimated working hours (361,15034,720)/20,900 hours $15.62 per hour For 560 hours in 2012 = $15.62*560 $8,747 (d) Sum of the years' digits = 1+2+3+4+5+6+7+8 36 Depreciation = Years remaining in asset's useful life/Sum of the years' digits x Depreciable cost Depreciable cost = 361,150 - 34,720 $326,430 $ $ $ $ $ As of beginning of 2014, the remaining useful life is 6.75 years (because 2012 had 0.25 years and 2013 had 1 full year: 8 years - 0.25 - 1 = 6.75) Depreciation for 2014 = $326,430*6.75/36 61,206 (e) Doubledeclining rate = 1/8 years x 200% = 25% Depreciation = Beginning of the year book value x Double declining rate For 2012: 361,150*25%*3/12 22,571.88 For 2013: (361,15022,571.88)*25% 84,645 Brief Exercise 135 Sport Pro Magazine sold 28,320 annual subscriptions on August 1, 2012, for $25 each. Prepare Sport Pro's (a) August 1, 2012, journal entry and (b) the December 31, 2012, annual adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date (a) Debit Credit 8/1/12 (b) Account Titles and Explanation 12/31/12 Workings: (a) Cash is debited for 28,320*$25 $708,000 Note: The credit is for \"Unearned revenue\". There are no options given via drop down menus. The best fit title is this and sometimes you may find the title in another name with same meaning. Let me know if you have a doubt. (b) Revenue is earned for 5 months when the subscription paid earlier was for 12 months. Therefore, subscription revenue = $708,000*5/12 295,000 Brief Exercise 137 Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Cash Credit 22,100 (please note: this is additional credit) Please note: There should have been 6 total columns but only 5 are given. Hence, I have entered cash below. The actual journal entry should look like this: Account titles and explanation Debit Credit Wages expense 28,280 Federal withholding taxes payable 3,090 Incorrect FICA taxes payable State withholding taxes payable 1,710 incorrect title 1,150 Incorrect Insurance premium payable 230 Cash (28280309017101150230) 22,100 Exercise 133 On December 31, 2012, Alexander Company had $1,296,800 of shortterm debt in the form of notes payable due February 2, 2013. On January 21, 2013, the company issued 24,770 shares of its common stock for $43 per share, receiving $1,065,110 proceeds after brokerage fees and other costs of issuance. On February 2, 2013, the proceeds from the stock sale, supplemented by an additional $231,690 cash, are used to liquidate the $1,296,800 debt. The December 31, 2012, balance sheet is issued on February 23, 2013. Show how the $1,296,800 of shortterm debt should be presented on the December 31, 2012, balance sheet. ALEXANDER COMPANY Partial Balance Sheet December 31, 2012 $ Total liabilities 1,296,800 Please note: The above table should have had another row for total liabilities. Since it is not given, I have mentioned it below. The partial balance sheet will actually appear like the one shown below: Partial balance sheet: Current liabilities: Notes payable 231,690 Longterm debt Notes payable refinanced Total liabilities 1,065,110 1,296,800 When the company expects to refinance as on the balance sheet date, we have to exclude the shortterm obligations from the current liabilities and show it as longterm debt. Exercise 1311 Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) Debit Credit 2. wrong (To record the warranty expense) 3. (To record the warranty liabilitiy) Workings: Sales = 599*$6,600 each 3,953,400 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. wrong (To record the sale) 2. (To record the warranty expense) 3. Workings: In the 1st journal entry, sales = 3,953,400 - 179,400 3,774,000 3rd journal entry: Warranty revenue 17,200/172,000 * 179,400 17,940 Please note: Since drop down menus are not provided, I have given the best fitting title for the above entries. Let me know if you find a different title in your drop down menus and I shall assist you in choosing the best one. Brief Exercise 137 Your answer is partially correct. Try again. Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Exercise 1311 Your answer is partially correct. Try again. Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) 2. (To record the warranty expense) 3. Debit Credit (To record the warranty liabilitiy) (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. (To record the sale) 2. (To record the warranty expense) 3. Notes Payable Sales Revenue Sales Taxes Payable Interest Expense Interest Payable Salaries and Wages Expenses Salaries and Wages Payable Purchases SUTA Taxes Payable FICA Taxes Pyable Union Dues Payable Unearned Sales Revenue Discount on Notes Payable Withholding Taxes Payable Purchases Returns and Allowances Debit Credit Warranty Expense Warranty Liability Warranty Revenue Unearned Warranty Revenue Brief Exercise 137 Your answer is partially correct. Try again. Lexington Corporation's weekly payroll of $28,280 included FICA taxes withheld of $1,710, federal taxes withheld of $3,090, state taxes withheld of $1,150, and insurance premiums withheld of $230. Prepare the journal entry to record Lexington's payroll. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Solution: Salaries and Wages expense 28,280 Withholding taxes payable (Federal) 3,090 FICA taxes payable 1,710 SUTA taxes payable 1,150 Insurance Premium payable 230 Salaries and Wages payable (28280-3090-1710-1150-230) 22,100 Dear student, I have entered the amounts given in the question only. It is still highlighting and hence you need to check with your instructor regarding this. Also, there is one more row that is required in the last and is missing. So, I highly doubt there is an error in the system itself. I have updated the titles as per the given options by you. Kindly check with your instructor. Exercise 1311 Your answer is partially correct. Try again. Selzer Equipment Company sold 599 Rollomatics during 2012 at $6,600 each. During 2012, Selzer spent $17,200 servicing the 2year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2012 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. (To record the sale) 2. (To record the warranty expense) 3. (To record the warranty liabilitiy) Solution: 2. Warranty liability 17,200 Inventory 17,200 [Note: Warranty liability and estimated liability for warranty are synonyms. Please note that you have entered as \"Warranty revenue\" in the box and hence showing as incorrect, when I have given it as \"Estimated liability for warranty\". 3. Warranty expense Warranty liability 172,000 172,000 [Please note that you have entered the amount as 17,200 when I have given it as 172,000 and hence showing as incorrect] (b) Prepare 2012 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,400 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $172,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. Use "Inventory" account to record the warranty expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. (To record the sale) 2. (To record the warranty expense) 3. Solution: 1. Cash Sales revenue Unearned warranty revenue 3,953,400 3,774,000 179,400 [Please note: I had correctly given as \"Unearned warranty revenue\" but you have entered it as \"Warranty liability\" and hence showing as incorrect.] Notes Payable Sales Revenue Sales Taxes Payable Interest Expense Interest Payable Salaries and Wages Expenses Salaries and Wages Payable Purchases SUTA Taxes Payable FICA Taxes Payable Union Dues Payable Unearned Sales Revenue Discount on Notes Payable Withholding Taxes Payable Purchases Returns and Allowances Warranty Expense Warranty Liability Warranty Revenue Unearned Warranty Revenue
