Accounting Help

08 Jul Accounting Help

Hearty Fried Chicken bought equipment on January​ 2, 2010, for $27,000.The equipment was expected to remain in service 4 years and to perform 6,000 fry jobs. At the end of the​ equipment’s useful​ life, Hearty

estimates that its residual value will be $3,000. The equipment performed 600 jobs the first​ year, 1,800

the second​ year, 2,400 the third​ year, and 1,200 the fourth year.

Requirements

1.	Prepare a schedule of depreciation expense per year for the equipment under the three depreciation methods. After two years under​ double-declining-balance depreciation, the company switched to the​ straight-line method. Show your computations.​ Note: 3 depreciation schedules must be prepared.
2.	Which method tracks the wear and tear on the equipment most​ closely?

Requirement 1. Prepare a schedule of depreciation expense per year for the equipment under the three depreciation methods. Begin with​ straight-line depreciation.

									Depreciation
SL		–	Accum. Deprec., Book Value, Cost, Deprec. Cost, Residual value, Useful life(units), OR Useful life(years)	=		÷		=	expense

Question 2

Peace Bank recently traded in office fixtures. Here are the​ facts:

Old​ fixtures:	New​ fixtures:
	​Cost, $92,000		Cash​ paid, $103,000​, plus the old fixtures
	Accumulated​ depreciation,$75,000

Requirements

1.	Record Peace Bank’s trade-in of old fixtures for new ones.
2.	Now​ let’s change one fact and see a different outcome. Peace Bank feels compelled to do business with Elm Furniture, a bank​ customer, even though the bank can get the fixtures elsewhere at a better price. Peace Bank is aware that the new​ fixtures’ market value is only $117,000. Now record the​ trade-in.

Requirement 1. Record

Peace Bank’s trade-in of old fixtures for new ones.

Journal Entry
Date	Accounts	Debit	Credit
		Accum. Deprec.(new), Accum. Deprec.(old), cash, gain on exchange of assets, lost on exchange of assets, office fixtures(new), OR office fixtures((old)

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Question 3

​Miracle Printers (MP) manufactures printers. Assume that MP recently paid $600,000 for a patent on a new laser printer. Although it gives legal protection for 20​ years, the patent is expected to provide a competitive advantage for only 8 years.

Requirements

1.	Assuming the​ straight-line method of​ amortization, make journal entries to record​ (a) the purchase of the patent and​ (b) amortization for year 1.
2.	After using the patent for 4 years, MP learns at an industry trade show that another company is designing a​ more-efficient printer. On the basis of this new​ information, MP​ decides, starting with year 5​, to amortize the remaining cost of the patent over two remaining​ years, giving the patent a total useful life of 6 years. Record amortization for year 5.

Requirement 1. ​(a) Record the purchase of the patent.

Journal Entry
Date	Accounts	Debit	Credit
Year 1	Accum. Depletion, Accum. Depreciation, Amortization expense, Cash, Depletion expense, Depreciation expense, Patents, OR Supplies

Question 4

Consider the following note payable transactions of Concert Video Productions.

2011
May 1May 1	Purchased equipment costing $12,000 by issuing a​ one-year, 3% note payable.
Dec. 31	Accrued interest on the note payable.
2012
May 1May 1	Paid the note payable at maturity.

Requirement

1. Journalize the transactions for the company.

Requirement 1. Journalize the purchase of equipment costing $12,000 by issuing a​ one-year,

3% note payable.

General Journal
DATE		ACCOUNTS	DEBIT	CREDIT
2011
May.	1	Cash, Equipment, Interest expense, Interest payable, Note payable-short term, sales revenue

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Question 5

The accounting records of Earth and WaterEarth and Water Ceramics included the following at December 31, 2011:

Estimated warranty payable   Beginning balance 3,000

In the​ past, Earth and Water​’s warranty expense has been 6% of sales. During​ 2012, Earth and Water

made sales of $103,000 and paid $4,000 to satisfy warranty claims.

Requirements

1. Journalize Earth and Water​’s warranty expense and warranty cash payments during 2012. Explanations not required.

2. What balance of Estimated warranty payable will Earth and Water report on its balance sheet at December​ 31, 2012?

Requirement 1. Journalize the warranty expense.

Journal Entry
Date	Accounts	Debit	Credit
		Accounts payable, Cash, Est. warranty payable, sales revenue, sales tax payable, OR warranty expense

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Question 6

The following transactions of San FranciscoSan Francisco Pharmacies occurred during 2010 and 2011:

Data table

2010

Jan 9- Purchased computer equipment at a cost of $8,000​, signing a​ six-month, 8% note payable for that amount.

29- Recorded the​ week’s sales of $69,000​, three-fourths on​ credit, and​ one-fourth for cash. Sales amounts are subject to a​ 6% state sales tax.

Feb 5- Sent the last​ week’s sales tax to the state.

28- Borrowed $204,000 on a​ four-year, 9% note payable that calls for $51,000

annual installment payments plus interest. Record the​ short-term and​ long-term portions of the note payable in two separate accounts.

July 9- Paid the​ six-month, 8%​ note, plus​ interest, at maturity.

Aug 31- Purchased inventory for $9,000​, signing a​ six-month, 10% note payable.

Dec 31- Accrued warranty​ expense, which is estimated at​ 3% of sales of $605,000.

31- Accrued interest on all outstanding notes payable. Make a separate interest accrual for each note payable.

2011

Feb 28- Paid the first installment and interest for one year on the​ four-year note payable.

28- Paid off the​ 10% note plus interest at maturity.

Requirement

1. Journalize the transactions in San Francisco​’s general journal. Explanations are not required.

Requirement 1. Journalize the transactions in San Francisco​’s general journal. Explanations are not required.

​First, journalize the purchase of computer equipment.

General Journal
DATE		ACCOUNTS	DEBIT	CREDIT
2010
Jan.	9	Accounts receivable, Cash, Computer equipment, Est. warranty payable, interest expense, Interest payable, Inventory, Note payable- long term, Note payable- short term, sales payable, sales revenue, sales tax payable, OR warranty expense

Question 7

Skylar Systems completed the following stock issuance​ transactions:

June 19	Issued 1,900 shares of $1 par common stock for cash of $13.50 per share.
July 3	Sold 260 shares of $2.00, no-par preferred stock for $13,000 cash.
11	Received equipment with market value of $22,000. Issued 9,000 shares of
	the $1 par common stock in exchange.

Requirements

1.	Journalize the transactions. Explanations are not required.
2.	How much​ paid-in capital did these transactions generate for Skylar Systems?

Requirement 1. Journalize the transactions. Explanations are not required.

Begin by journalizing the transaction from June 19.

Journal Entry
Date	Accounts	Debit	Credit
June	19	Cash, common stock, equipment, inventory, paid-in capital in excess of par, preferred stock

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Question 9

The charter for TVKXAS−TV​, Inc. authorizes the company to issue​ 100,000 shares of

​$44​, no-par preferred stock and​ 500,000 shares of common stock with​ $1 par value. During its​ start-up phase, KXAS completed the following​ transactions:

Sept. 6- issued 250 shares of common stock to the promoters who organized the corporation, receiving cash of $7,000.

12- issued 400 shares of preferred stock for cash of $28,000

14- issued 1,100 shares of common stock in exchange for land valued at $17,000

30- closed net income of $31,000 into retained earnings

Requirements

1.	Record the transactions in the journal.
2.	Prepare the​ stockholders’ equity section of the KXAS−TV balance sheet at September 30​, , 2010.

Requirement 1. Record the transactions in the journal.

Journal Entry
Date	Accounts	Debit	Credit
Sept	6	cash, common stock, income summary, land, paid-in capital in excess of par, preferred stock, retained earnings

Question 9

B-Wireless needed additional capital to​ expand, so the business incorporated. The charter from the state of Georgia authorizes B−Mobile to issue 80,000 shares of 7%​, $150 par preferred stock and 120,000 shares of​ no-par common stock. B−Mobile completed the following transactions:

Dec	2	Issued 18,000 shares of common stock for equipment with a market value of $110,000
	6	Issued 1,000 shares of preferred stock to acquire a patent with a market value of $150,000
	9	Issued 10,000 shares of common stock for cash of $50,000

Requirements

1.	Record the transactions in the journal.
2.	Prepare the​ stockholders’ equity section of the B−Mobile Wireless balance sheet at December 31. The ending balance of Retained earnings is $90,000.

Requirement 1. Record the transactions in the journal.

Record the Dec. 2 issuance of common stock.

Journal Entry
Date	Accounts	Debit	Credit
Dec.	2	cash, common stock, equipment, paid-in capital in excess of par, patent, preferred stock, retained earnings, treasury stock

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Accum. Depr