Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

From January 1 to December 31 , the following summary transactions occurred: a. Purchased inventory on account, $325,800. b. Sold inventory on account, $567,200. The

image text in transcribed
image text in transcribed
From January 1 to December 31 , the following summary transactions occurred: a. Purchased inventory on account, $325,800. b. Sold inventory on account, $567,200. The inventory cost $342,600. c. Received cash from customers on account, $558,700. d. Paid cash on account, $328,500. e. Paid cash for salaries, $94,700, and for utilities, $52,700. In addition, Parts Unlimited had the following transactions during the year: Apri1 1 Purchased equipment for $95,000 using a note payable, due in 12 months plus 81 interest. The company also paid cash of $3,200 for freight and $3,800 for instailation and testing of the equipsent. The equipnent has an estimated residual value of $10,000 and a ten-year oervice 1ffe. June 30 Purehased a patent for $40,000 fron a third-party narketing conpany related to the packaging of the company's products. The patent has a 20 -year useful life, after vhich it is expected to havo no value. Cetober 1 sold equipment for $30,200. The equipment cont $60,700 and had accumulated depreciation of $37,400 at the beginning of the year. Additional depreciation for 2021 up to the point of the sale in $8,500. (Hint: Total accumulated depreciation equals the amount at the beginning of the year plus the amount recorded for the current year.) Noverber 15 several older pieces of equipment were inproved by replacing najor conponents at a cost of $54,100. These inprovements are expected to enhance the equipment's operating capabilities. [Record this transaction using Alternative 2-capitalization of new cost.) Year-end adjusting entries: a. Depreciation on the equipment purchased on April 1, 2021, calculated using the straight-line method. b. Depreciation on the remaining equipment, $21,500. c. Amortization of the patent purchased on June 30,2021 , using the straight-line method. d. Accrued interest payable on the note payable. e. Equipment with an original cost of $65,400 had the following related information at the end of the year: accumulated depreciation of $40,300, expected cash flows of $15,700, and a fair value of $10,800. f. Accrued income taxes at the end of the year are $12,600. Answer is complete but not entirely correct. Using the information from the requirements above, complete the 'Analysis'. (Round "fixed asset turnover ratio" answer to 2 dec

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

Auditing Leadership The Professional And Leadership Skills You Need

Authors: Brian D. Kush

1st Edition

0470450010, 9780470450017

More Books

Students also viewed these Accounting questions

Question

What is hacking? What can be done to prevent hacking?

Answered: 1 week ago

Question

8-6 Who poses the biggest security threat: insiders or outsiders?

Answered: 1 week ago