Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for

image text in transcribedimage text in transcribed

For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Recorded $600 of depreciation expense. b. Sold land that had originally cost $55,000 for $42,300 in cash. c. Recorded a $437,000 payment for the cost of developing and registering a patent. d. Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life. e. Capitalized $18,400 of cash expenditures made to extend the useful life of production equipment. f. Expensed $7,100 of cash expenditures incurred for routine maintenance of production equipment. g. Sold a used machine for $162,000 in cash. The machine originally cost $540,000 and had been depreciated for the first two years of its five-year useful life using the double-declining-balance method. (Hint. You must compute the balance of the accumulated depreciation account before you can record the sale.) h. Purchased a business for $8,000,000 in cash. The fair values of the net assets acquired were as follows: Land, $2,200,000; Buildings, $4,600,000; Equipment, $2,500,000; and Long-Term Debt, $1,800,000. Transaction Assets Liabilities Net Income a. Depreciation expense -600 Accumulated depreciation -600 Land -55,000 b. Cash +42,300 Loss on sale of land -12,700 C. d. e. f. g. h. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Recorded $600 of depreciation expense. b. Sold land that had originally cost $55,000 for $42,300 in cash. c. Recorded a $437,000 payment for the cost of developing and registering a patent. d. Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life. e. Capitalized $18,400 of cash expenditures made to extend the useful life of production equipment. f. Expensed $7,100 of cash expenditures incurred for routine maintenance of production equipment. g. Sold a used machine for $162,000 in cash. The machine originally cost $540,000 and had been depreciated for the first two years of its five-year useful life using the double-declining-balance method. (Hint. You must compute the balance of the accumulated depreciation account before you can record the sale.) h. Purchased a business for $8,000,000 in cash. The fair values of the net assets acquired were as follows: Land, $2,200,000; Buildings, $4,600,000; Equipment, $2,500,000; and Long-Term Debt, $1,800,000. Transaction Assets Liabilities Net Income a. Depreciation expense -600 Accumulated depreciation -600 Land -55,000 b. Cash +42,300 Loss on sale of land -12,700 C. d. e. f. g. h

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Money For Ministerial Leadership Key Practical And Theological Insights

Authors: Nimi Wariboko

1st Edition

1625640129, 9781625640123

More Books

Students also viewed these Accounting questions

Question

=+What is Pats minimin choice?

Answered: 1 week ago

Question

Explain the benefits of a health and wellness strategy

Answered: 1 week ago

Question

Describe the components of a workplace wellness programme

Answered: 1 week ago