Q5

Purchase a land, paying $70,000 cash plus a $500,000 note payable.

The original cost of a building is $850,000, The building is depreciated using straight-line method. The useful life is 20years. Residual value is estimated to be $50,000. Record the depreciation expense at the year end.

At the year end, disposed a Truck for $6,000 cash. Its original cost is $32,000, updated accumulated depreciation at the year beginning is $22,000. Record the disposal. The truck is depreciated using a double-declining balance method. Its useful life is 10 years. And no residual value is estimated.

Q6

May1 Purchase a building costing $900,000 by signing a nine-month 8% note payable.

Dec.31 accrued interest on the note payable

Jan. 30 of the next year, paid the note payable plus interest at maturity.

Q7

Issue 2,000,000 shares of $2 par value common stock at $10 per share

Declare a 10% stock dividend. Before the declaration, 50,000,000 shares of $2 par value common stock are outstanding. Market value at the time of declaration is $ 10 per share.