On January 1, 2018, the general ledger of Parts Unlimited includes the following account balances: 177,400 27,400 52, 800 355,000 390, 500 Land Equipment ed depreciation 187,000 29,800 535,000 251.300 Retained Earnings $1,003,100 $1,003,100 From January 1 to December 31, the following summary transactions occur Purchased inventory on account, $340.800. a Sold inventory on account, $625,200. The inventory cost $357600 b. Received cash from customers on account, $573,700 c. Paid cash on account, $343.500 d. Paid cash for salaries, $109,700, and for utilities, $67,700 In addition, Parts Unlimited had the following transactions during the year: i e i i susrehased equi ment for si10,000 uang-note payable, due in 12 matha plas 5% interest. the company also paid cash ot $4,700 for freight and $5,300 for installation and testing of the eqguipment. The equipment has company" s products. The patent has a 20-year useful life, after which it is expected to have no value. beginning of the year. Additional depreciation tor 2018 up to the point of the sale is $10,000 inprovements are expected to enhance the equipment's operating capabilities. Record this transaction using renidual value of $16,000 and a ten-year service lifo June 30 Furchased a patent for $55,000 trom a third-party marketing related to the packaging of the Oetober 1 Sold equipment for $46,700 The equipaent coat $75,700 and had accunulated depreciation ot $52,400 at the by roplacing major componenta at a cost oE $69,100. These Hovenber 15 older pieces of a. Depreciation on the equipment purchased on April 1, 2018, calculated using the straight-line method. b. Depreciation on the remaining equipment, $36,500. c. Amortization of the patent purchased on June 30, 2018, using the straight-line method d. Accrued interest payable on the note payable. e. Equipment with an original cost of $81,900 had the following related information at the end of the year accumulated depreciation of $52,300, expected cash flows of $30,700, and a fair value of $18,300. f. Accrued income taxes at the end of the year are $27600. General Trial Balance Statement Balance SheetAnalysis Using the information from the requirements above, complete the 'Analysis'. (Round final answers to two decimal places.) (a) Calculate the asset 0.75, is the company more or less efficient at generating sales with its fixed assets than other companies in the same industry? fixed asset turnover ratio for the year, using all long-term assets. If the industry average fixed asset turnover is its of purchase, expected output was 20,000 units, and actual production for 2018 was 2,000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in income and total assets for 2018 in 2018 would have been cost of an externally purchased patent is capitalized and then amortized over the remaining life of the patent. The difference for 2018 is as: ional for 2018 income and total assets in 2018 would have boen higher. (True or False)
