See attachment

BE9-3

Compute straight-line depreciation. (SO 3), AP Alan Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2012. The truck is expected to have a salvage value of $4,000 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method.

BE9-7

Journalize entries for disposal of plant assets. (SO 5), AP Prepare journal entries to record these transactions: (a) Benton Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received. (b) Assume the same information as in part (a), except that accumulated depreciation for the equipment is $37,200 instead of $41,000.

BE9-8

Journalize entries for sale of plant assets. (SO 5), AP Clark Company sells office equipment on July 31, 2012, for $21,000 cash. The office equipment originally cost $72,000 and as of January 1, 2012, had accumulated depreciation of $42,000. Depreciation for the first 7 months of 2012 is $4,600. Prepare the journal entries to (a) update depreciation to July 31, 2012, and (b) record the sale of the equipment.

BE9-10

Account for intangibles?patents.

(SO 7), AP

Tanya Company purchases a patent for $156,000 on January 2, 2012. Its estimated useful life is 6 years.

(a)	Prepare the journal entry to record amortization expense for the first year.
(b)	Show how this patent is reported on the balance sheet at the end of the first year.

E9-1

Determine cost of plant acquisitions.

(SO 1), C

The following expenditures relating to plant assets were made by Newport Company during the first 2 months of 2012.

1.	Paid $7,000 of accrued taxes at the time the plant site was acquired.
2.	Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.
3.	Paid $850 sales taxes on a new delivery truck.
4.	Paid $21,000 for parking lots and driveways on the new plant site.
5.	Paid $250 to have the company name and slogan painted on the new delivery truck.
6.	Paid $8,000 for installation of new factory machinery.
7.	Paid $900 for a 1-year accident insurance policy on the new delivery truck.
8.	Paid $75 motor vehicle license fee on the new truck.

Instructions

(a)	Explain the application of the cost principle in determining the acquisition cost of plant assets.
(b)	List the numbers of the transactions, and opposite each indicate the account title to which each expenditure should be debited.

E9-5

Determine straight-line depreciation for partial period. (SO 3), AP Deloise Company purchased a new machine on October 1, 2012, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000 working hours during its 8-year life. Instructions Compute the depreciation expense under the straight-line method for 2012 and 2013, assuming a December 31 year-end.

E9-7

Journalize transactions related to disposals of plant assets.

(SO 5), AP

Kemp Co. has delivery equipment that cost $50,000 and has been depreciated $24,000.

Instructions

Record entries for the disposal under the following assumptions.

(a)	It was scrapped as having no value.
(b)	It was sold for $37,000.

(c)	It was sold for $20,000.

E9-16

Answer questions on depreciation and intangibles.

(SO 2, 7), C

The questions listed below are independent of one another.

Instructions

Provide a brief answer to each question.

(a)	Why should a company depreciate its buildings?
(b)	How can a company have a building that has a zero reported book value but substantial fair value?

(c)	What are some examples of intangibles that you might find on your college campus?
(d)	Give some examples of company or product trademarks or trade names. Are trade names and trademarks reported on a company's balance sheet?

P9-3A

Journalize entries for disposal of plant assets.

(SO 5), AP

Presented here are selected transactions for Snow Company for 2012.

Jan.???1	Retired a piece of machinery that was purchased on January 1, 2002. The machine cost $71,000 on that date and had a useful life of 10 years with no salvage value.
June??30	Sold a computer that was purchased on January 1, 2009. The computer cost $30,000 and had a useful life of 5 years with no salvage value. The computer was sold for $12,000.
Dec.??31	Discarded a delivery truck that was purchased on January 1, 2007. The truck cost $33,400 and was depreciated based on an 8-year useful life with a $3,000 salvage value.

Instructions

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Snow Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2011.)

BE14-2

Identify important regulatory changes. (SO 2), C The Sarbanes-Oxley Act of 2002 (SOX) has important implications for the financial community. Explain two implications of SOX.

BE14-4

Classify manufacturing costs.

(SO 3), C

Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO).

(a)	________ Frames and tires used in manufacturing bicycles.
(b)	________ Wages paid to production workers.

(c)	________ Insurance on factory equipment and machinery.
(d)	________ Depreciation on factory equipment.

BE14-5

Classify manufacturing costs.

(SO 3), C

Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials, direct labor, or manufacturing overhead.

(a)	________ Windshield.
(b)	________ Engine.

(c)	________ Wages of assembly line worker.
(d)	________ Depreciation of factory machinery.

(e)	________ Factory machinery lubricants.
(f)	________ Tires.

(g)	________ Steering wheel.
(h)	________ Salary of painting supervisor.

BE14-6

Identify product and period costs.

(SO 4), C

Identify whether each of the following costs should be classified as product costs or period costs.

(a)	________ Manufacturing overhead.
(b)	________ Selling expenses.

(c)	________ Administrative expenses.
(d)	________ Advertising expenses.

(e)	________ Direct labor.
(f)	________ Direct material.

BE14-9

Prepare current assets section.

(SO 7), AP

In alphabetical order below are current asset items for Ruiz Company's balance sheet at December 31, 2012. Prepare the current assets section (including a complete heading).

Accounts receivable	$200,000
Cash	62,000
Finished goods	91,000
Prepaid expenses	38,000
Raw materials	73,000
Work in process	87,000

BE14-10

Determine missing amounts in computing total manufacturing costs.

(SO 6), AP

Presented below are incomplete manufacturing cost data. Determine the missing amounts for three different situations.

	Direct Materials Used	Direct Labor Used	Factory Overhead	Total Manufacturing Costs
(1)	$40,000	$61,000	$?50,000	?
(2)	?	$75,000	$140,000	$296,000
(3)	$55,000	?	$111,000	$310,000

BE14-11

Determine missing amounts in computing cost of goods manufactured.

(SO 6), AP

Use the same data from BE14?10 above and the data below. Determine the missing amounts.

	Total Manufacturing Costs	Work in Process (1/1)	Work in Process (12/31)	Cost of Goods Manufactured
(1)	?	$120,000	$82,000	?
(2)	$296,000	?	$98,000	$321,000
(3)	$410,000	$463,000	?	$715,000

E14-9

Determine missing amounts in cost of goods manufactured schedule.

(SO 6), AP

An incomplete cost of goods manufactured schedule is presented below.

MOLINA MANUFACTURING COMPANY Cost of Goods Manufactured Schedule For the Year Ended December 31, 2012
Work in process (1/1)			$210,000
Direct materials
Raw materials inventory (1/1)	$???????
Add: Raw materials purchases	158,000
Total raw materials available for use	???
Less: Raw materials inventory (12/31)	22,500
Direct materials used		$190,000
Direct labor		???
Manufacturing overhead
Indirect labor	18,000
Factory depreciation	36,000
Factory utilities	68,000
Total overhead		122,000
Total manufacturing costs			?????
Total cost of work in process			?????
Less: Work in process (12/31)			81,000
Cost of goods manufactured			$530,000

Instructions

Complete the cost of goods manufactured schedule for Molina Manufacturing Company.

P14-4A

Prepare a cost of goods manufactured schedule, a partial income statement, and a partial balance sheet.

(SO 5, 6, 7), AP

The following data were taken from the records of Clarkson Manufacturing Company for the fiscal year ended June 30, 2012.

Raw Materials		Factory Insurance	$??4,600
Inventory 7/1/11	$?48,000	Factory Machinery
Raw Materials		Depreciation	16,000
Inventory 6/30/12	39,600	Factory Utilities	27,600
Finished Goods		Office Utilities Expense	8,650
Inventory 7/1/11	96,000	Sales	534,000
Finished Goods		Sales Discounts	4,200
Inventory 6/30/12	75,900	Plant Manager's Salary	58,000
Work in Process		Factory Property Taxes	9,600
Inventory 7/1/11	19,800	Factory Repairs	1,400
Work in Process		Raw Materials Purchases	96,400
Inventory 6/30/12	18,600	Cash	32,000
Direct Labor	139,250
Indirect Labor	24,460
Accounts Receivable	27,000

Instructions

(a)

Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)

(a) CGM

$386,910

(b)

Prepare an income statement through gross profit.

(b) Gross profit

$122,790

(c)

Prepare the current assets section of the balance sheet at June 30, 2012.

(c) Current assets

$193,100

BE93 Compute straightline depreciation. (SO 3), AP Alan Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2012. The truck is expected to have a salvage value of $4,000 at the end of its 4year useful life. Compute annual depreciation for the first and second years using the straightline method. BE97 Journalize entries for disposal of plant assets. (SO 5), AP Prepare journal entries to record these transactions: (a) Benton Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received. (b) Assume the same information as in part (a), except that accumulated depreciation for the equipment is $37,200 instead of $41,000. BE98 Journalize entries for sale of plant assets. (SO 5), AP Clark Company sells office equipment on July 31, 2012, for $21,000 cash. The office equipment originally cost $72,000 and as of January 1, 2012, had accumulated depreciation of $42,000. Depreciation for the first 7 months of 2012 is $4,600. Prepare the journal entries to (a) update depreciation to July 31, 2012, and (b) record the sale of the equipment. BE910 Account for intangiblespatents. (SO 7), AP Tanya Company purchases a patent for $156,000 on January 2, 2012. Its estimated useful life is 6 years. (a) Prepare the journal entry to record amortization expense for the first year. (b) Show how this patent is reported on the balance sheet at the end of the first year. E91 Determine cost of plant acquisitions. (SO 1), C The following expenditures relating to plant assets were made by Newport Company during the first 2 months of 2012. 1. 2. 3. 4. Paid $7,000 of accrued taxes at the time the plant site was acquired. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. Paid $850 sales taxes on a new delivery truck. Paid $21,000 for parking lots and driveways on the new plant site. 5. 6. 7. 8. Paid $250 to have the company name and slogan painted on the new delivery truck. Paid $8,000 for installation of new factory machinery. Paid $900 for a 1year accident insurance policy on the new delivery truck. Paid $75 motor vehicle license fee on the new truck. Instructions (a) Explain the application of the cost principle in determining the acquisition cost of plant assets. (b) List the numbers of the transactions, and opposite each indicate the account title to which each expenditure should be debited. E95 Determine straightline depreciation for partial period. (SO 3), AP Deloise Company purchased a new machine on October 1, 2012, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000 working hours during its 8year life. Instructions Compute the depreciation expense under the straightline method for 2012 and 2013, assuming a December 31 yearend. E97 Journalize transactions related to disposals of plant assets. (SO 5), AP Kemp Co. has delivery equipment that cost $50,000 and has been depreciated $24,000. Instructions Record entries for the disposal under the following assumptions. (a) It was scrapped as having no value. (b) It was sold for $37,000. (c) It was sold for $20,000. E916 Answer questions on depreciation and intangibles. (SO 2, 7), C The questions listed below are independent of one another. Instructions Provide a brief answer to each question. (a) Why should a company depreciate its buildings? (b) How can a company have a building that has a zero reported book value but substantial fair value? (c) What are some examples of intangibles that you might find on your college campus? (d) Give some examples of company or product trademarks or trade names. Are trade names and trademarks reported on a company's balance sheet? P93A Journalize entries for disposal of plant assets. (SO 5), AP Presented here are selected transactions for Snow Company for 2012. Jan. Retired a piece of machinery that was purchased on January 1, 2002. The machine cost 1 $71,000 on that date and had a useful life of 10 years with no salvage value. June Sold a computer that was purchased on January 1, 2009. The computer cost $30,000 and 30 had a useful life of 5 years with no salvage value. The computer was sold for $12,000. Dec. Discarded a delivery truck that was purchased on January 1, 2007. The truck cost $33,400 31 and was depreciated based on an 8year useful life with a $3,000 salvage value. Instructions Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Snow Company uses straightline depreciation. (Assume depreciation is up to date as of December 31, 2011.) BE142 Identify important regulatory changes. (SO 2), C The SarbanesOxley Act of 2002 (SOX) has important implications for the financial community. Explain two implications of SOX. BE144 Classify manufacturing costs. (SO 3), C Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO). (a) ________ Frames and tires used in manufacturing bicycles. (b) ________ Wages paid to production workers. (c) ________ Insurance on factory equipment and machinery. (d) ________ Depreciation on factory equipment. BE145 Classify manufacturing costs. (SO 3), C Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials, direct labor, or manufacturing overhead. (a) ________ Windshield. (b) ________ Engine. (c) ________ Wages of assembly line worker. (d) ________ Depreciation of factory machinery. (e) ________ Factory machinery lubricants. (f) ________ Tires. (g) ________ Steering wheel. (h) ________ Salary of painting supervisor. BE146 Identify product and period costs. (SO 4), C Identify whether each of the following costs should be classified as product costs or period costs. (a) ________ Manufacturing overhead. (b) ________ Selling expenses. (c) ________ Administrative expenses. (d) ________ Advertising expenses. (e) ________ Direct labor. (f) ________ Direct material. BE149 Prepare current assets section. (SO 7), AP In alphabetical order below are current asset items for Ruiz Company's balance sheet at December 31, 2012. Prepare the current assets section (including a complete heading). Accounts receivable $200,000 Cash 62,000 Finished goods 91,000 Prepaid expenses 38,000 Raw materials 73,000 Work in process 87,000 BE1410 Determine missing amounts in computing total manufacturing costs. (SO 6), AP Presented below are incomplete manufacturing cost data. Determine the missing amounts for three different situations. Direct Materials Used Direct Labor Used Factory Overhead Total Manufacturing Costs (1) $40,000 $61,000 $50,000 ? (2) ? $75,000 $140,000 $296,000 (3) $55,000 ? $111,000 $310,000 BE1411 Determine missing amounts in computing cost of goods manufactured. (SO 6), AP Use the same data from BE14-10 above and the data below. Determine the missing amounts. Total Manufacturing Costs Work in Process (1/1) Work in Process (12/31) Cost of Goods Manufactured (1) ? $120,000 $82,000 ? Total Manufacturing Costs Work in Process (1/1) Work in Process (12/31) Cost of Goods Manufactured (2) $296,000 ? $98,000 $321,000 (3) $410,000 $463,000 ? $715,000 E149 Determine missing amounts in cost of goods manufactured schedule. (SO 6), AP An incomplete cost of goods manufactured schedule is presented below. MOLINA MANUFACTURING COMPANY Cost of Goods Manufactured Schedule For the Year Ended December 31, 2012 Work in process (1/1) $210,000 Direct materials Raw materials inventory (1/1) $? Add: Raw materials purchases 158,000 ? 22,500 Direct materials used $190,00 0 Direct labor ? Manufacturing overhead Indirect labor 18,000 Factory depreciation 36,000 Factory utilities 68,000 Total overhead 122,000 Total manufacturing costs ? Total cost of work in process ? Less: Work in process (12/31) 81,000 Cost of goods manufactured $530,000 Total raw materials available for use Less: Raw materials inventory (12/31) Instructions Complete the cost of goods manufactured schedule for Molina Manufacturing Company. P144A Prepare a cost of goods manufactured schedule, a partial income statement, and a partial balance sheet. (SO 5, 6, 7), AP The following data were taken from the records of Clarkson Manufacturing Company for the fiscal year ended June 30, 2012. Raw Materials Inventory 7/1/11 Raw Materials Inventory 6/30/12 Finished Goods Inventory 7/1/11 Finished Goods Inventory 6/30/12 Work in Process Inventory 7/1/11 Work in Process Inventory 6/30/12 Direct Labor Factory Insurance $48,000 Factory Machinery Depreciation 39,600 Factory Utilities Office Utilities Expense 96,000 Sales $4,600 16,000 27,600 8,650 534,000 Sales Discounts 4,200 75,900 Plant Manager's Salary 58,000 Factory Property Taxes 9,600 19,800 Factory Repairs Raw Materials Purchases 18,600 Cash 1,400 96,400 32,000 139,250 Indirect Labor 24,460 Accounts Receivable 27,000 Instructions (a) Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.) (a) CGM $386,910 (b) Prepare an income statement through gross profit. (b) Gross profit $122,790 (c) Prepare the current assets section of the balance sheet at June 30, 2012. (c) Current assets $193,100