Fixed Asset Transanctions

Fixed asset transactions Perform the following fixed asset transaction exercises. Part 1 1. Read the following case and record the transactions and the corresponding adjustment entries: At Caribe Music, a company dedicated to the sale of music equipment, there have been the following transactions and adjustments in the past two years. The transactions are related to the use of the shipping equipment. The depreciation method was the double declining balance First Year Transaction July 7 $ 700 was paid in truck repairs. Record the depreciation of the truck for the calendar Dic 31 year. The truck had a useful life of 3 years. The truck had a residual of $ 4,500 2nd year Jan 8 A new truck was purchased for cash for $ 52,000. Maintenance and repairs were performed on the Jun 10 truck for $ 625. July 9 $ 300 was paid for repairs to the used truck that was purchased in the first year. The truck that was purchased in the first year was Setp 19 sold for $ 20,000. Record the depreciation as of the date the truck is sold Dic 31 Record the depreciation of the truck purchased in the second year. The truck has a useful life of 5 years. The truck has a residual of $ 7,200. Part 2: Fixed assets turnover ratio 1. Read the following case and compute the fixed asset tumover ratio. 2. Explain in your own words how the result of the turnover ratio of both companies is interpreted. La Flor de Mayo and La Rosa del Monte compete in the moving service sector. The greatest assets of these companies are moving trucks, warehouses, and technological equipment. Sales and the average book value of fixed assets (book value) reported in the latest financial statements of each company is as follows: La Flor de Mayo La Rosa del Monte Sales (in millions $ 12,320 $15,500 Average book value of fixed $7,000 $8,30 assets (in millions Part 3. Book value 1. Read the following case and calculate the book value of Home Depot's current and prior year fixed assets. 2 . Explain the difference in the book value between the two years. Home Depot is a distributor of building materials, gardening and kitchen equipment, among others. The following information is from the company's books. Fixed assets Current year Last year Buildings $28,300 $21,500 Machinery, equipment and 32,250 22,600 computer systems 8.200 Other fixed assets 6,800 Accumulated depreciation and (31,500) (23,100 amortization