Question 1 Czyz and Ng are accountants at Blossom Printers. Blossom has not adopted the revaluation model for accounting for its property, plant, and equipment. The accountants are having disagreements over the following transactions during the fiscal year ended December 31, 2017: 1. Blossom bought equipment on January 1, 2017, for $86,000, including installation costs. The equipment has a useful life of five years. Blossom depreciates equipment using the double diminishing-balance method. "Since the equipment as installed in our system cannot be removed without considerable damage, it will have no resale value. It should not be depreciated but, Instead, expensed immediately," Czyz argues. 2. Depreciation for the year was $46,000. Since the company's profit is expected to be low this year, Czyz suggests deferring depreciation to a year when there are higher profits, 3. Blossom purchased equipment at a fire sale for $36,000. The equipment would normally have cost $49,000. Czyz believes that the following entry should be made: 49,000 Equipment Cash Gain on Fair Value Adjustment of Equipment 36,000 13,000 4. Czyz says that Blossom should carry its furnishings on the balance sheet at their liquidation value, which is $30,000 less than cost. 5. Blossom rented office space for one year, effective September 1, 2017. Six months of rent at $3,000 per month was paid in advance. Czyz believes that the following entry should be made on September 1: 18,000 Rent Expense Cash 18,000 6. Land that cost $42,000 was appraised at $60,000. Czyz suggests the following journal entry: 18,000 Land Gain on Fair Value Adjustment of Land 18,000 Ng disagrees with Czyz in each of the situations. Screenshot (b) Ng disagrees with Czyz in each of the situations. (b) Prepare the correct journal entry to record each transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit 1. (To record purchase of equipment for cash) (To record depreciation) 2. 3. 4. 5. (To record correct entry for rent) (To record adjusting entry of rent expense) (To record adjusting entry (alternative method)) 6