Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $121,950. The seller agreed to allow a 5.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,260. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $870. The loader operator is paid an annual salary of $32,790. The cost of the company's theft insurance policy increased by $2,450 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $7.300. Required a. Determine the amount to be capitalized in an asset account for the purchase of the loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.) Costs that are to be capitalized: List price Total costs $ Pitney Co. purchased an office building, land, and furniture for $769,400 cash. The appraised value of the assets was as follows: Land Building Furniture Total $163,728 224,049 473,950 $861,728 Required a. Compute the amount to be recorded on the books for each asset. b. Show the purchase in a horizontal statements model like the following one: c. Prepare the general journal entry to record the purchase. Complete this question by entering your answers in the tabs below. Required A Required B Required Compute the amount to be recorded on the books for each asset. (Do not round Intermediate calculations. Round your final answers to nearest whole dollar.) Allocated Cost Land Building Furniture Total Required A Required B Pitney Co. purchased an office building, land, and furniture for $769,400 cash. The appraised value of the assets was as follows: Land Building Purniture Total $763,728 224,049 473,950 $861220 Required a. Compute the amount to be recorded on the books for each asset b. Show the purchase in a horizontal statements model like the following one: c. Prepare the general journal entry to record the purchase. Complete this question by entering your answers in the tabs below. Required A Required B Required Show the purchase in a horizontal statements model like the following one: (Do not round Intermediate calculations. Round your final answers to nearest whole dollar. In column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA for not affected. Enter any account balances with a minus sign.) PITNEY CO. Statements Model Equity Revenue Expenses Net Income Cash Flows Assets Building Cash . Land Furn. Journal entry worksheet Record depreciation expense for year 1. Note: Enter debits before credits General Journal Debit Credit Date Yr. 1 Un Company sold office equipment with a cost of $39,180 and accumulated depreciation of $34,911 for $6,520. Required a. What is the book value of the asset at the time of sale? b. What is the amount of gain or loss on the disposal? c. How would the sale affect net income (increase, decrease, no effect) and by how much? d. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect) and by how much? e. How would the event affect the statement of cash flows (inflow, outflow, no effect) and in what section? by a Book value 6. Gain (loss) on sale c. Net income would d. Total assets would e. Effect Section by Becker Office Service purchased a new computer system in Year 1 for $34,400. It is expected to have a five-year useful life and a $2,600 salvage value. The company expects to use the system more extensively in the early years of its life. Required a. Calculate the depreciation expense for each of the five years, assuming the use of straight-line depreciation. Year Depreciation Expense 1 2. 3 4 5 b. Calculate the depreciation expense for each of the five years, assuming the use of double-declining balance depreciation. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Year Depreciation Expense 1 2 3 4 5 d. Assume that Becker Office Service sold the computer system at the end of the third year for $18.500. Compute the amount of gain or loss using each depreciation method. (Round your answers to the nearest dollar amount.) Straight-Line Double-Declining Balance Gain
