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Recording Acquisition Scenarios Review of the property, plant, and equipment accounts of James Company reveals the following transactions. 1 . On January 1 , new
Recording Acquisition Scenarios
Review of the property, plant, and equipment accounts of James Company reveals the following transactions.
On January new equipment is purchased with a list price of $ The company did not take advantage of a cash discount available upon full payment of the invoice within days. Shipping costs paid by the seller were $ Installation costs are $ representing of the monthly salary of the manager installation took two days A wall is moved two feet at a cost of $ to make room for the equipment. Cash discounts not taken are considered interest expense.
During January, the rst month of operations, the newly purchased equipment became inoperative due to a defect. The seller repaired the equipment at no cost; however, the specially trained operator was idle during the week the machine was inoperative. The operator was paid regular wages $ during the period, although the only work performed was to observe the repair by the factory representative. Hint: Choose your debit answer from accounts Equipment and Manufacturing Overhead.
On January the company bought xtures with a list price of $; the company paid $ cash and issued a oneyear, noninterestbearing note payable for the balance. The current interest rate for this type of note was
On January the company purchased an automatic counter to be attached to a machine in use; cost was $ The estimated useful life of the counter was years, and the estimated life of the machine was years.
On July a contractor completed construction of a building for the company. The company paid the contractor with a $ face value, year, bonds payable, at which time nancial consultants advised that the bonds would sell at $
On December the company received a property contribution from the city for future expansion of its manufacturing facilities. The fair value of this property is estimated at $ although the cost of the property on the citys records is $ There are no donorimposed conditions, and the transaction is not considered to be an exchange. Question: Record depreciation at the end of the year for equipment, xtures and building. None of these assets is expected to have a residual value except xtures residual value is $ Estimated useful lives are: xtures years; equipment, years; and building, years. The company uses straightline depreciation. Provide a separate entry for each asset.
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