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At the beginning of 2 0 2 3 , Moon Co . started its business to make and sell food blenders. On March 1 ,
At the beginning of Moon Co started its business to make and sell food blenders. On
March Moon paid cash of $ to acquire a factory building with several pieces of
equipment left inside. According to the appraisals, the building had a fair market value of
$ and the equipment had a fair market value of $ The building was estimated
to have a useful life of years with salvage value of $ and equipment was estimated to
have useful life of years with no salvage value. Moon decided to adopt the doubledeclining
balance method to record depreciation on the building and the straightline method to record
depreciation for equipment.
On July Moon spent $ cash to purchase a brand name for the food benders which
trademark protection was granted. Legal fees and other costs associated with the registration
of the trademark totaled $ The useful life of the trademark was determined to be years
with salvage value of $ Moon chose the straightline method to record amortization on
its intangible assets.
On October Moon sold out one piece of equipment for $ The equipment was
purchased on March with an allocated cost of $ No other equipment was sold during
this year.
ANALYZE the effects of the above transactions on the specific account in the Accounting
Equation or RECORD the above transactions Choose either analysis or recording
Make any necessary adjustments for depreciation and amortization at
Show the effects of all the above transactions on Moons Balance Sheet as of
and Income Statement of Note: the key is to understand how each
financial statement will be affected by each account used in the above requirements
and Thus, there is no need to prepare the complete financial statements.
Focusing on the piece of equipment that was purchased on March and then sold out
on October please provide a brief takeaway you have learned from the accounting
and reporting of a plant asset during its life cycle in a business ie acquisition use in
operation disposal
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