At the beginning of the year, Young Company bought three used machines from Vince, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Machine A Machine B Machine C Amount paid for asset $ 8,000 $ 26,400 $ 10,100 Installation costs 300 700 600 Renovation costs prior to use 2,300 1,600 1,000 Repairs after production began 480 430 525 By the end of the first year, each machine had been operating 3,000 hours. Required: Compute the cost of each machine. Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following: TIP: Remember that the formula for double-declining-balance uses cost minus accumulated depreciation (not residual value) Estimates Machine Life Residual Value Depreciation Method A 5 years $ 300 Straight-line B 10,000 hours 1,000 Units-of-production C 6 years 900 Double-declining-balance

Palmer Cook Music Productions manages and operates two bands. The company entered into the following transactions during a recent year.

January		2		Purchased a tour bus for $102,000 by paying $37,000 cash and signing a $65,000 note due in two years. In its accounting system, the company records the vehicle distinct from other types of equipment.
January		8		After the bus was used for nearly one week, it was painted with the logos of the two bands at a cost of $500, on account. The logos did not increase the lifespan, operating capacity, or operating efficiency of the bus, but they were thought to be useful in promoting the bands.
January		30		Wrote a check for the amount owed on account for the work completed on January 8.
February		1		Purchased new speakers and amplifiers and wrote a check for the full $37,500 cost.
February		8		Paid $400 cash for minor repairs to the tour bus.
March		1		Paid $37,000 cash and signed a $275,000 five-year note to purchase a small office building and land. An appraisal indicated that the building and land contributed equally to the total price.
March		31		Paid $96,000 cash to acquire the goodwill and certain tangible assets of Kris Myth, Inc. The fair values of the tangible assets acquired were $22,000 for band equipment and $60,000 for recording equipment.

Required:

1. 1-a. Complete the table below for the above transactions. TIP: Goodwill is recorded as the excess of the purchase price over the fair value of individual assets. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.)

Palmer Cook Music Productions manages and operates two bands. The company entered into the following transactions during a recent year.

January		2		Purchased a tour bus for $102,000 by paying $37,000 cash and signing a $65,000 note due in two years. In its accounting system, the company records the vehicle distinct from other types of equipment.
January		8		After the bus was used for nearly one week, it was painted with the logos of the two bands at a cost of $500, on account. The logos did not increase the lifespan, operating capacity, or operating efficiency of the bus, but they were thought to be useful in promoting the bands.
January		30		Wrote a check for the amount owed on account for the work completed on January 8.
February		1		Purchased new speakers and amplifiers and wrote a check for the full $37,500 cost.
February		8		Paid $400 cash for minor repairs to the tour bus.
March		1		Paid $37,000 cash and signed a $275,000 five-year note to purchase a small office building and land. An appraisal indicated that the building and land contributed equally to the total price.
March		31		Paid $96,000 cash to acquire the goodwill and certain tangible assets of Kris Myth, Inc. The fair values of the tangible assets acquired were $22,000 for band equipment and $60,000 for recording equipment.

1. 1-b. Prepare the journal entries for each of the above transactions.

2. 2. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Palmer Cook Music Productions should report for the quarter ended March 31. For convenience, the equipment and vehicle are depreciated the same way, using the straight-line method with a useful life of five years and no residual value. The building is depreciated using the double-declining-balance method, with a 8-year useful life and residual value of $37,000. TIP: Calculate depreciation from the acquisition date to the end of the quarter.

3. 3. Prepare a journal entry to record the depreciation calculated in requirement 2.