Exercise 8-8A Effect of double-declining-balance depreciation on financial statements LO 8-3 Golden Manufacturing Company started operations by acquiring $99,200 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $99,200 cash, had an expected useful life of six years, and had an estimated salvage value of $19,840. Golden Manufacturing earned $85,580 and $66,930 of cash revenue during Year 1 and Year 2, respectively. Golden Manufacturing uses double-declining-balance depreciation. Required: Prepare income statements, balance sheets, and statements of cash flows for Year 1 and Year 2. Use a vertical statements format. (Hint Record the events in T-accounts prior to preparing the statements.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar. Amounts to be deducted and net loss should be indicated with a minus sign.) GOLDEN MANUFACTURING COMPANY Financial Statements Year 1 Year 2 Income statements Balance sheets Assets Total assets Stockholders' equity Total stockholders' equity Statements of cash flows Cash flows from operating activities Cash flows from investing activities: Cash flows from financing activities Net change in cash Endina cash balance Exercise 8-11A Events related to the acquisition, use, and disposal of a tangible plant asset: straight-line depreciation LO 8-2,8-5 City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $25,700. In addition, City paid sales tax and title fees of $910 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $6,340. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2 b & c. Assume that the taxi was sold on January 1, Year 3, for $21.277. Prepare the general journal entries to record the Year1 depreciation and sale of the taxi in Year 3 Complete this question by entering your answers in the tabs below Req A Req B and C using the straight-line method, compute the depreciation expense for Year 1 and Year 2. (Round your answers to the nearest whole dollar amount.) Year 1 Year 2 Exercise 8-18A Effect of revenue expenditures versus capital expenditures on financial statements LO 8- 8 On January 1, Year 1, Webb Construction Company overhauled four cranes, resulting in a slight increase in the life of the cranes. Such overhauls occur regularly at two-year intervals and have been treated as a maintenance expense in the past. Management is considering whether to capitalize this year's $29,460 cash cost in the Cranes asset account or to expense it as a maintenance expense. Assume that the cranes have a remaining useful life of two years and no expected salvage value. Assume straight-line depreciation. Required a. Determine the amount of additional depreciation expense Webb would recognize in Year 1 and Year 2 if the cost were capitalized in the Cranes account. b. Determine the amount of expense Webb would recognize in Year 1 and Year 2 if the cost were recognized as maintenance expense. c. Determine the effect of the overhaul on cash flow from operating activities for Year 1 and Year 2 if the cost were capitalized and expensed through depreciation charges d. Determine the effect of the overhaul on cash flow from operating activities for Year 1 and Year 2 if the cost were recognized as maintenance expense. Year 1 Year2 a. Depreciation expense b. Maintenance expense c. Operating activities d. Operating activities Exercise 8-20A Computing and recording goodwill LO 8-10 Arizona Corp. acquired the business Date Systems for $ showed tangible assets of $350,000, liabilities of $20,000, and stockholders' equity of $330,000. An appraiser a market value of the tangible assets at $315,000 at the date of acquisition. Arizona Corp.'s financial condition acquisition is shown in the following statements model: 325.000 cash and assumed all liabilities at the date of purchase. Data's books ssessed the foir just prior to the Assets Tang. Assets NA Equity Rev.Exp.Net Inc. Cash +558,88 Liab Cash 550,000 NA NA NA NA NA NA Required: a. Compute the amount of goodwill acquired. b. Record the acquisition in a financial statements model like the preceding one. d. Record the acquisition in general journal format. Complete this question by entering your answers in the tabs below. Required A Required B Required D Compute the amount of goodwill acquired