Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

[The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On

image text in transcribed
image text in transcribed
[The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $57,000 cash (estimated useful life, ten years). b. On January 1, purchased another business for $167,000 cash, including $6,000 for goodwill. The assets included accounts receivable with a fair value of $14,000 and property and equipment with a fair value of $147,000 (with a residual value of $15,435 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31 , constructed a storage shed on land leased from D. Heald. The cost of the shed was $18,600. The company uses straight-line depreciation, The lease will expire in nine years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $6,200 during the current year. e. On December 31 of the current year, sold Machine A for $7,000 cash. Original cost was $20,000; accumulated depreciation to December 31 of the prior year was $13,280 (on a straight-line basis with a $3,400 residual value and five-year useful life). Record the depreclation expense in transaction e(1) and the sale in transaction e(2). t On December 31 of the current year, paid $5,900 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $47,300; accumulated depreciation to December 31 of the prior year was $3,100 (on a straight-line basis with a $7,000 residual value and 13-year useful life). Required: 1. Record journal entries for transactions (a) through (f). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet 234567 Record the $57,000 purchase of patent for cash on January 1 . Noke: Enter debits before credits. Required information [The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $57.000 cash (estimated useful life, ten years). b. On January 1, purchased another business for $167,000 cash, including $6,000 for goodwill. The assets included accounts receivable with a fair value of $14,000 and property and equipment with a fair value of $147,000 (with a residual value of $15,435 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $18,600. The company uses straight-line depreciation. The lease will expire in nine years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $6,200 during the current year. e. On December 31 of the current year, sold Machine A for $7,000 cash. Original cost was $20,000; accumulated depreciation to December 31 of the prior year was $13,280 (on a straight-line basis with a $3,400 residual value and five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2). f. On December 31 of the current year, paid \$5,900 for a complete reconditioning of Machine B acquired on January 1 of the prior year, Original cost, $47,300; accumulated depreciation to December 31 of the prior year was $3,100 (on a straight-line basis with a $7,000 residual value and 13-year useful life). 2. For each of these the assets involved in transactions (a) through ( f ), record the adjusting entry for depreciation or amortization expense at the end of the current year, Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet 23456 Record $57,000 purchase of patent for cash on January 1 . Note: Enter debits before credits

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Beginners

Authors: Warren Piper Ruell

1st Edition

1713479397, 978-1713479390

More Books

Students also viewed these Accounting questions