Chapter 7 , 7-5 survey of accounting 7th addition

Problem 7-5 Part 1 Only page 281 a. Loss on impairment of goodwill 3.000.000 b. Amortization of governmental and legal costs: (Original Cost + Years (Life)] Portion of Year - Amortization ex Depletion of timber rights: (Original Cost + Total Board Feet) x Board Feet Cut and Sold - Depletion One on July 1 We a uncle of her years and a and buildings Instructions P7-1 Allocate payments and receipts to fixed asset accounts The following payments and receipts are related to land, land improvements, and be acquired for use in a wholesale apparel business. The receipts are entified by an he amount of deprecate for the years ended 2015, by the straight line nuthod and the d e , 16 value of ). The O 2017 and 20YH by adlining L 2016 method 12.500 New tire retreading 400.000 Depreciation by two methods, sale of fired reading equipment acquired t o $ 100 the estimated useful life of four years and an estimades t ed information regarding the effect of t expense each year. On the basis of the data pro e declining balance method was the first week of the fourth year, the equipment was wild cala The The manager requested informasi of depreciation d ecal value $100 he other testan t e 31.750 1,500 . Architects and engineer's fees for plans and supervision... b. Cost of filing and grading land... . cCost of removing building purchased with land in fel... d. Cost of paving parking lot to be used by customers... e Cost of real estate acquired as a plant site:Land (5375.000) and Building 1525,0001... Cost of repairing windstorm damage during construction 9. Cost of repairing vandalin damage during construction.. . h. Cost of trees and shrubbery planted........ Delinquentreal estate taxes on property, assumed by purchaser.... Fee paid to attorney for title search... k Finder's fee paid to real estate agency Interest incurred on building loan during construction....... . ... m. Money borrowed to pay building contractor....... ... n Payment to building contractor for new building.................. o. Proceeds from insurance company for windstorm and vandalism damage......... p. Premium on one-year insurance policy during construction...... . Proceeds from sale of salvage materials from old building...... . ...... Refund of premium on Insurance policy ipi canceled after 10 months ........... Special assessment paid to city for extension of water main to the property .......... Instructions 40,000 775.000 mine the annual depreciation Expense for each of the estimated t o lated depreciation at the end of each year, and the book value of the od of each year by the right-line method and the deed d. The following columnar headings are u sed for each wee the 4500 Year Depreciation pense 6,500 1.000 End of lustrate the effects on the accounts and financial stateme lustrate the effects on the accounts and financial states price of $15,250 instead of $23.300 of the mig Instructions 1. Assign each payment and receipt to Land (unlimited life), Land Improvements limited life Building, or Other Accounts. Indicale receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows: Lond improvements Other Accounts Item Land Building 2. Determine the increases to Land, Land Improvements, and Building 3. The costs assigned to the land, which is used as a plant site, will not be depreciated while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. P7-5 Amortization and depletion entries Data related to the acquisition of timber rights and intangle was of Gen Company de ing the current year ended December 31 are as follows: On December 31, Gemini Company determined that $3.000,00 will impaired b. Governmental and legal costs of $920,000 were incurred by Gemini Company on June 30 in obtaining a patent with an estimated economic life of eight years. A t is to be for one half year. 6. Timber rights on a tract of land were purchased for $1.350,000 on March 6 The sand of timber is estimated at 15.000.000 board feet. During the current year, 300.000 board feet of timber were cut and sold P7-2 Compare three depreciation methods Bayside Coatings Company purchased waterproofing equipment on January 2, 20Y4, for $190,000 The equipment was expected to have a useful life of four years and a residual value of $9.000 Instructions Determine the amount of the martiration, depletion or impairment for the current year for each of the foregoing items Illustrate the effects on the sand financial statements of the destments for each item Instructions Determine the amount of depreciation expense for the years ended December 31, 2011, 2016, and 2047, by (a) the straight line method and the ble declining balance meth also determine the total depreciation expense for the four years by each method. The columnar headings are suggested for recording the depreciation expense amounts: each method. The following Straight line Depreciation Expense Double Declinina Balance