Question
Help me please. #1: Benedict Company incurred the following costs. 1. Sales tax on factory machinery purchased $ 5,000 2. Painting of and lettering on
Help me please.
#1: Benedict Company incurred the following costs. 1. Sales tax on factory machinery purchased $ 5,000 2. Painting of and lettering on truck immediately upon purchase 700 3. Installation and testing of factory machinery 2,000 4. Real estate brokers commission on land purchased 3,500 5. Insurance premium paid for fi rst years insurance on new truck 880 6. Cost of landscaping on property purchased 7,200 7. Cost of paving parking lot for new building constructed 17,900 8. Cost of clearing, draining, and fi lling land 13,300 9. Architects fees on self-constructed building 10,000 Indicate to which account Benedict would debit each of the costs. Exercise #2: On March 1, 2019, Westmorlan Company acquired real estate on which it planned to construct a small offi ce building. The company paid $75,000 in cash. An old warehouse on the property was razed at a cost of $8,600; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,100 attorneys fee for work concerning the land purchase, $5,000 real estate brokers fee, $7,800 architects fee, and $14,000 to put in driveways and a parking lot. Instructions (a) Determine the amount to be reported as the cost of the land. (b) For each cost not used in part (a), indicate the account to be debited. Exercise #3: Linton Company purchased a delivery truck for $34,000 on January 1, 2019. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2019 and 12,000 in 2020. Instructions (a) Compute depreciation expense for 2019 and 2020 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method. (b) Assume that Linton uses the straight-line method. (1) Prepare the journal entry to record 2019 depreciation. (2) Show how the truck would be reported in the December 31, 2019, balance sheet.
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