Required information {The following information applies to the questions displayed below.) 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 $72,000 by paying $22,000 cash and signing a $50,000 note due in two years. In its accounting system, the company 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 $450, on account. The logos did not increase the lifespan, operating capacity, or operating efficiency of the bus, but they were thought to be useful in promoting the bands. January 30 Wrote a check for the amount owed on account for the work completed on January 8. February 1 Purchased new speakers and anplifiers and wrote a check for the full $15,000 cost. February 8 Paid $350 cash for minor repairs to the tour bus. March i Paid $22,000 cash and signed a $200,000 five-year note to purchase a small office building and land. An appraisal indicated that the building and land contributed equally to the total price. March 31 Paid $81,000 cash to acquire the goodwill and certain tangible assets of Kris' Myth, Incorporated. The fair values of the tangible assets acquired were $11,000 for band equipment and $51,000 for recording equipment. 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 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 $22,000. 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 Required information Reg 1B Req 2 Reg 3 Prepare the journal entries for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Credit General Journal No Dato January 02 Debit 72,000 1 Vehicles Cash Notes Payable (long-term) 22.000 50,000 450 2 January 08 Advertising Expenso Accounts Payable > 450 3 January 30 No Journal Entry Required > 15,000 4 February 01 Equipment Bank Charges Expense 15,000 350 5 February 08 Repairs and Maintenance Expense Cash 350 6 March 01 Land Buildings Cash 111,000 111.000 22,000 Required information Oy Vu Very SA Accounts Payable 450 > 3 January 30 No Journal Entry Required 15,000 4 February 01 Equipment Bank Charges Expense 15,000 350 5 February 08 Repairs and Maintenance Expense 350 Cash March 01 111,000 111,000 Land Buildings Cash Notes Payable (long-term) 00 22.000 200,000 7 March 31 Equipment Equipment Goodwill Cash > > > 11,000 51,000 X 19,000 81,000 Ren 10 Reg 2 > Complete this question by entering your answers in the tabs below. Reg 1B Req 2 Req3 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 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 $22,000. TIP: Calculate depreciation from the acquisition date to the end of the quarter. (Do not round Intermediate calculations.) Show less Vehicles Equipment Buildings Partial Year $ 3,456 s 480 $ 1,998 Complete this question by entering your answers in the tabs below. Req 18 Reg 2 Reg 3 1 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) No Date General Journal Debit Credit March 31 Depreciation Expenso 3,456 Vehicles 3,456 Depreciation Expense 3 480 Equipment X 480 Depreciation Expense 1,998 Buildings 1,998
