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2112014 Spring D- LearnSmart 31
Assignment:
Week 7
1.
Exercise 10-17
Partial-year depreciation; disposal of plant asset LO P2
Rayya Co. purchases and installs a
machine on January 1, 2013, at a total cost of $92,800. Straight-line
depreciation is taken each year for four years assuming a eight-year life and
no salvage value. The machine is disposed of on July 1, 2017, during its
fifth year of service.
Prepare entries to record the
partial year’s depreciation on July 1, 2017.
Prepare entries to record the
disposal under the following separate assumptions:
(1)
The machine is sold for $43,036
cash.
(2)
Rayya receives an insurance
settlement of $38,976 resulting from the total destruction of the machine in
a fire.
2.
Exercise 10-18
Depletion of natural resources LO P1, P3
On April 2, 2013, Montana Mining
Co. pays $3,888,210 for an ore deposit containing 1,535,000 tons. The company
installs machinery in the mine costing $188,300, with an estimated seven-year
life and no salvage value. The machinery will be abandoned when the ore is
completely mined. Montana begins mining on May 1, 2013, and mines and sells
130,700 tons of ore during the remaining eight months of 2013.
Prepare the December 31, 2013,
entries to record both the ore deposit depletion and the mining machinery
depreciation. Mining machinery depreciation should be in proportion to the
mine’s depletion.(Round your unit depreciation and depletion
rates to 2 decimal places.)
Exercise 10-24A
Recording plant asset disposals LO P2, P5
[The following
information applies to the questions displayed below.]
On January 2, 2013,
Bering Co. disposes of a machine costing $38,900 with accumulated
depreciation of $20,955. Prepare the entries to record the disposal under
each of the following separate assumptions.
3.
Exercise 10-24A Part 1
1.
The machine is sold for $15,050
cash.
4.
Problem 10-1A Plant
asset costs; depreciation methods LO C1, P1
Timberly Construction negotiates a
lump-sum purchase of several assets from a company that is going out of
business. The purchase is completed on January 1, 2013, at a total cash price
of $810,000 for a building, land, land improvements, and four vehicles. The
estimated market values of the assets are building, $492,900; land, $297,600;
land improvements, $74,400; and four vehicles, $65,100. The company’s fiscal
year ends on December 31.
Required:
1.1
Prepare a table to allocate the
lump-sum purchase price to the separate assets purchased.
1.2
Prepare the journal entry to record
the purchase.
2.
Compute the depreciation expense
for year 2013 on the building using the straight-line method, assuming a
15-year life and a $30,000 salvage value.
3.
Compute the depreciation expense
for year 2013 on the land improvements assuming a five-year life and
double-declining-balance depreciation.
5.
Problem 10-5A
Depreciation methods LO P1
A machine costing $211,000 with a
four-year life and an estimated $17,000 salvage value is installed in Luther
Company’s factory on January 1. The factory manager estimates the machine
will produce 485,000 units of product during its life. It actually produces
the following units: year 1, 121,600; year 2, 123,700; year 3, 119,800; and
year 4, 129,900. The total number of units produced by the end of year 4
exceeds the original estimate—this difference was not predicted. (The machine
must not be depreciated below its estimated salvage value.)
Required:
Compute depreciation for each year
(and total depreciation of all years combined) for the machine under each
depreciation method.(Round your per unit depreciation to 2 decimal
places.)
6.
Problem 10-7A Natural
resources LO P3
On July 23 of the current year,
Dakota Mining Co. pays $6,660,000 for land estimated to contain 9,000,000
tons of recoverable ore. It installs machinery costing $1,260,000 that has a
10-year life and no salvage value and is capable of mining the ore deposit in
eight years. The machinery is paid for on July 25, seven days before mining
operations begin. The company removes and sells 464,250 tons of ore during
its first five months of operations ending on December 31. Depreciation of
the machinery is in proportion to the mine’s depletion as the machinery will
be abandoned after the ore is mined.
Required:
Prepare entries to record the
following.(Do not round your intermediate calculations.):
(a)
To record the purchase of the
land.
(b)
To record the cost and
installation of machinery.
(c)
To record the first five months’
depletion assuming the land has a net salvage value of zero after the ore is
mined.
(d)
To record the first five months’
depreciation on the machinery.
Exercise 11-5
Interest-bearing notes payable with year-end adjustments LO P1
[The following
information applies to the questions displayed below.]
Keesha Co. borrows
$220,000 cash on December 1, 2013, by signing a 150-day, 9% note with a face
value of $220,000.
7.
Exercise 11-5 Part 1
1.
On what date does this note
mature?
8.
Exercise 11-5 Parts 2.
& 3.
2.
& 3.
What is the amount of interest
expense in 2013 and 2014 from this note?(Use
360 days a year. Do not round intermediate calculations.)
9.
Exercise 11-5 Part 4
4(a)
Prepare journal entry to record
issuance of the note on November 1, 2013.
4(b)
Prepare journal entry to record
accrual of interest at the end of 2013.(Use
360 days a year.)
4(c)
Prepare journal entry to record
payment of the note at maturity. assuming no reversing entries were made on
January 1.
10.
Exercise 11-8
Payroll-related journal entries LO P3
BMX Company has one employee. FICA
Social Security taxes are 6.2% of the first $110,100 paid to its employee,
and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are
0.8% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.
Gross
Pay through August
Gross
Pay for September
a.
$
6,640
$
830
Prepare the employer’s September
30 journal entries to record theemployer’spayroll taxes expense and its related liabilities.(Round your answers to 2 decimal places.)
Exercise 11-9 Warranty
expense and liability computations and entries LO P4
[The following
information applies to the questions displayed below.]
Hitzu Co. sold a
copier costing $4,500 with a two-year parts warranty to a customer on August
16, 2013, for $9,000 cash. Hitzu uses the perpetual inventory system. On
November 22, 2014, the copier requires on-site repairs that are completed the
same day. The repairs cost $123 for materials taken from the Repair Parts
Inventory. These are the only repairs required in 2014 for this copier. Based
on experience, Hitzu expects to incur warranty costs equal to 4% of dollar
sales. It records warranty expense with an adjusting entry at the end of each
year.
11.
Exercise 11-9 Part 5
5(a)
Prepare journal entries to record
the copier’s sale.
5(b)
Prepare journal entry to record
the adjustment on December 31, 2013, to recognize the warranty expense.
5(c)
Prepare journal entry to record
the repairs that occur in November 2014.
Problem 11-1A
Short-term notes payable transactions and entries LO P1
[The following information
applies to the questions displayed below.]
Tyrell Co. entered
into the following transactions involving short-term liabilities in 2012 and
2013.
2012
Apr. 20
Purchased $38,500 of
merchandise on credit from Locust, terms are 1/10, n/30. Tyrell uses the
perpetual inventory system.
May 19
Replaced the April 20
account payable to Locust with a 90-day, $35,000 note bearing 7% annual
interest along with paying $3,500 in cash.
July 8
Borrowed $69,000 cash
from National Bank by signing a 120-day, 12% interest-bearing note with a
face value of $69,000.
__?__
Paid the amount due on
the note to Locust at the maturity date.
__?__
Paid the amount due on
the note to National Bank at the maturity date.
Nov. 28
Borrowed $33,000 cash
from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face
value of $33,000.
Dec. 31
Recorded an adjusting
entry for accrued interest on the note to Fargo Bank.
2013
__?__
Paid the amount due on
the note to Fargo Bank at the maturity date.
12.
Problem 11-1A Part 1
Required:
1.
Determine the maturity date for
each of the three notes described.
13.
Problem 11-1A Part 2
2.
Determine the interest due at
maturity for each of the three notes.(Do
not round your intermediate calculations. Use 360 days a year.)
14.
Problem 11-1A Part 3
3.
Determine the interest expense to
be recorded in the adjusting entry at the end of 2012.(Do not round your intermediate calculations.Use 360 days a year.)
15.
Problem 11-1A Part 4
4.
Determine the interest expense to
be recorded in 2013.(Do not round your intermediate calculations.
Use 360 days a year.)
16.
Problem 11-1A Part 5
5.1
Prepare journal entries for all
the preceding transactions and events for years 2012.(Do not round your intermediate calculations.)
5.2
Prepare journal
entries for all the preceding transactions and events for years 2013.(Do not round your intermediate calculations.)
