Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Palmer Cook Music Productions manages and operates two bands. The company entered into the following transactions during a recent year. January 2 Purchased a tour

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Palmer Cook Music Productions manages and operates two bands. The company entered into the following transactions during a recent year. January 2 Purchased a tour bus for $104,000 by paying $38,000 cash and signing a $66,000 note due in two years. In its accounting system, the cospany records the vehicle distinct from other types of equipment. January 8 After the bus was used for nearly one week, it was painted with the logos of the two bands at a cost of $550, on account. The logos did not increase the lifespan, operating capacity, or operating efficiency of the bus, but they wore thought to be usetul in promoting the bands. January 30 Wrote a check for the asount owed on account for the vork conpleted on January 8 . February 1 purchased new speakers and anplifiers and wrote a check for the fu11 $39,000 cost. February 8 paid $450 cash for minor repairs to the tour bus. Farch 1 Paid $38,000 cash and signed a $280,000 five-year note to parchase a ssall office building and land. An appraisal indicated that the building and land contributed equaliy to the total price. March 31 Paid $97,000 cash to acquire the goodwill and certain tangible assets of Kris" Myth, Incorporated. The fair values of the tangible assets acquired were $23,000 for band equipmont and $61,000 for recording equipent. 1-b. Prepare the journal entries for each of the above transactions. 2. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Palmer Cook Music Productions should report for the quarter ended March 31. For convenience, the equipment and vehicle are depreciated the same way, using the straight-line method with a usefut life of five years and no residual value. The building is depreciated using the double-declining-balance method, with a 10-year useful life ond residual value of $38,000, TIP. Calculate depreciation from the acquisition date to the end of the quarter. 3. Prepare a journal entry to record the depreciation calculated in requirement 2. Complete this question by entering your answers in the tabs below. Prepare the journal entries for each of the above transactions. (If no entry is required for a transaction/event, select "No journal Required" in the first account field.) Journal entry worksheet 567 Record the purchase of a tour bus for $104,000, paying $38,000 cash and financing the rest. Note: Enter debits before credits. For the tanglble and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Palmer Cook Music Productions should report for the quarter ended March 31 . For convenience, the equipment and vehicle are depreciated the same way, using the straight-line method with a useful life of five years and no residual value. The building is depreciated using the double-declining-balance method, with a 10 -year useful life and residual value of $38,000. TIP: Calculate depreciation from the acquisition date to the end of the quarter. (Do not round intermediate calculations.) Prepare a journal entry to record the depreciation calculated in requirement 2. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the depreciation expense for the three assets at the end of the quarter. Note: Enter debits before credits

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

Introduction To Managerial Accounting

Authors: Peter Brewer, Ray Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

2nd Canadian Edition

0070964777, 9780070964778

More Books

Students also viewed these Accounting questions

Question

Evaluate the determinant. 2 -1 4 7 -2 2 4

Answered: 1 week ago