Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Whispering industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2 These

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Whispering industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2 These assets were purchased as a lump sum for $226,920 cash. The following information was gathered: Asset 3 This machine was acquired by making a $30,500 down payment and issuing a $91,500,1-year, zero-interest-bearing note. The note is to be paid off in at the end of the first year. It was estimated that the arset could have been purchased outright for $111,020. Asset 4 This machinery was acquired by trading in used machinery. (The exchangelacks commercial substance) Facts concerning the trade-in are as tollows: Asset 5 Machinery was acquired by issuing 1.000 shares of $1 par value common stock. The stock was actively traded and had a market value. of 59 pershare. Construction of Building A building was constructed on land purchased last year at a cost of $146.400. Construction began on March 1 and was completed on September 1. The payments to the contractor were as follows: To finance construction of the building a $732,000,10% construction loain was taken out on March 1. The loan was repaid on September 1. The firm had $488,000 of other outstanding debt during the year at a borrowing rate of 12%. Record the acquisition of each of these assets. (List all debit entrles before credit entries. Round intermediote calculations to 5 decimal ploces, es. 1.25124 and final answer to 0 decimat places es. 58,971. Credit occount titles are automotically indented when amount is entered. Do not indent manually. If no entry ls required, select "No Entry' for the account titles and enter O for the amounts) Acquisition of Asset 3 Machinery Discount on Notes Payable Notes Payable Acoulsition of Asset 4 Machinery Cists G.M on Disposial of Machinery Acquisition of Asset 5 Machinery Equipment Cash (To record machinery)

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

Auditing And Assurance Services

Authors: Robert Ramsay, Timothy J Louwers

4th Edition

007739657X, 978-0077396572

More Books

Students also viewed these Accounting questions

Question

=+5. What do you want them to think?

Answered: 1 week ago

Question

=+What the product does for the end-user.)

Answered: 1 week ago