Question
Seller Corporation purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: purchase
Seller Corporation purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: purchase price, $50,000; brokers fees, $6,000; title search and other fees, $5,000; demolition of an old building on the property, $5,700; grading, $1,200; digging foundation for the road, $3,000; laying and paving driveway, $25,000; lighting $7,500; signs, $1,500. List the items and amounts that should be included in the Land account.
BE 2
Eastman Company purchased a delivery truck for $35,000 on January 1, 2008. The truck was assigned an estimated useful life of 5 years and has a residual value of $10,000. Compute depreciation expense using the double-declining-balance method for the years 2008 and 2009.
BE 3
Porika Company purchased a truck for $57,000. The company expected the truck to last four years or 100,000 miles, with an estimated residual value of $6,000 at the end of that time. During the second year the truck was driven 27,000 miles. Compute the depreciation for the second year under each of the methods below and place your answers in the blanks provided.
Units-of-activity $
Double-declining-balance $
BE 4
Record the following transactions for Verbatim Company.
1. On August 4, Verbatim sold merchandise on account to Reedy Company for $450, terms 2/10, n/30.
2. On August 7, Verbatim granted Reedy a sales allowance and reduced the cost of the merchandise by $50 because some of the goods were slightly damaged.
3. On August 12, Reedy paid the account in full.
BE 5
At December 31, 2008, Attwood Company reported Accounts Receivable of $34,000 and Allowance for Doubtful Accounts of $3,500. On January 7, 2009, Brady Enterprises declares bankruptcy and it is determined that the receivable of $1,200 from Brady is not collectible.
1. What is the cash realizable value of Accounts Receivable at December 31, 2008?
2. What entry would Attwood make to write off the Brady account?
3. What is the cash realizable value of Accounts Receivable after the Brady account is written off?
BE 6
Portillo Companys ledger at the end of the current year shows Accounts Receivable of $150,000.
Instructions
a. If Allowance for Doubtful Accounts has a credit balance of $3,000 in the trial balance and bad debts are expected to be 10% of accounts receivable, journalize the adjusting entry for the end of the period.
b. If Allowance for Doubtful Accounts has a debit balance of $3,000 in the trial balance and bad debts are expected to be 10% of accounts receivable, journalize the adjusting entry for the end of the period.
7. A $110 petty cash fund has cash of $15 and receipts of $90. The journal entry to replenish the account would include a credit to
8. A $100 petty cash fund has cash of $17 and receipts of $101. The journal entry to replenish the account would include a debit or credit to
9. A $100 petty cash fund has cash of $18 and receipts of $106. The journal entry to replenish the account would include a debit or credit to
Use the following information for questions 1011.
Berwick Company compiled the following financial information as of December 31, 2008:
Revenues $140,000
Berwick, Capital (1/1/08) 105,000
Equipment 40,000
Expenses 125,000
Cash 35,000
Berwick, Drawings 10,000
Supplies 5,000
Accounts payable 20,000
Accounts receivable 15,000
10. Berwicks assets on December 31, 2008 are
a. $235,000.
b. $170,000.
c. $80,000.
d $95,000.
11. Berwicks owners equity on December 31, 2008 is
a. $105,000.
b. $110,000.
c. $80,000.
d. $120,000.
BE 12
Balance sheet and income statements amounts as of December 31, 2008 for Lesleys Tutoring Service are listed below. Prepare a balance sheet and income statement in good form.
Supplies $1,000 Revenues $23,000
Rent expense 12,000 Cash 15,000
Accounts payable 9,000 Drawings 1,000
Accounts receivable 3,000 Notes payable 1,000
Depreciation expense 5,000 Equipment 6,000
Supplies expense 2,000 Building 16000
Inventory 1,800 Tax payable 960
Prepaid Rent 1,500 Lesley, Capital ?
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