Question
Can you please provide guidance if I don't have the right answers? Thank you! 1. Bowie Company made a lump sum purchase of land, building,
Can you please provide guidance if I don't have the right answers? Thank you!
1. Bowie Company made a lump sum purchase of land, building, and equipment. The following were the appraised values of each element:
PP&E Element Amount
Land $10,000
Building 35,000
Equipment 40,000
Bowie paid $65,000 cash for the lump sum purchase. What value should be allocated to the building? I got 26,765
2. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $18,000 for the truck. The truck is expected to have a $4,000 residual value and a 7-year life.Cambridge has a December 31 fiscal year end. Using the straight-line method, how much is the 2019 depreciation expense? I got 2,000
3. Somerset Company acquired a piece of equipment with a list price of $200,000 for $188,000.Freight to Somerset's location was $10,000.Installation and testing costs were $6,500.An old piece of equipment was scrapped as a result of this new purchase.The old piece of equipment had an undepreciated value (net book value) of $8,000.The new piece of equipment is expected to have a 10 year life and a salvage value of $15,000.What is the total value assigned to the new piece of equipment? I got 197,500
4. February 1, 2018, Salisbury Company purchased land for the future factory location at a cost of $127,000.The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2018. Costs incurred during this period were:
Item Amount
Demolition dilapidated building $3,200
Architect Fees $11,250
Legal Fees - for title search $1,650
Interest During Active Construction Period $5,025
Real estate transfer tax $750
Construction Costs $605,000
Using this information, how much should be recorded as the cost of the land? I got 131,850
5. On January 1, 2017, Frostburg Company purchased for $68,500, equipment having a service life of six years and an estimated residual value of $4,000. Frostburg has recorded depreciation of the equipment using the straight-line method.On December 31, 2019, before making any annual adjusting entries, the equipment was exchanged for new machinery having a fair value of $35,000.The transaction has commercial substance. Use this information to for all General Journal entries (without explanation) required to record the events for December 31, 2019.
General Journal:
Date Accounts Debit Credit
12/31/2019 Depreciation 10,750
Equipment 10,750
Machinery (New) 35,000
Loss on Exchange 1,250
Equipment 36,250
6. Bowie Company uses a calendar year and the straight line depreciation method.On December 31, 2018, after adjusting entries were posted, Bowie Company sold a machine which was originally purchased on January 1, 2015. The historical cost was $20,500, the salvage value assumed was $1,500 and the original estimated life was five years..It was sold for $4,000 cash. Using this information, how much should be recorded on December31 for theGain or (Loss)?Round to whole dollars. I got (1,300)
7. On January 2, 2019, Adelphi Company purchased a patent for $240,000 plus $5,000 in legal fees. On that date, the patent had a remaining legal life of 13 years. Adelphi Company expects to use the patent for 9 years after which time it will be worthless.How much is the annual amortization expense for 2019?Round to nearest whole dollar. I got 27,222
8. Annapolis Company was recently sold for $490,000.Annapolis had assets & liabilities appraised at the time of the sale in the amounts of:
Item Amount
Accounts Receivable assumed by buyer $102,000
Inventory $270,000
Property, Plant & Equipment (net) $520,000
Notes Payable assumed by buyer $635,000
Using this information, how much should be recorded as Goodwill for this transaction? Is it 233,000?
THANK YOU SO MUCH
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started