Project #51998 - acc 1

 

Acc. Problem: Question 1:

 

 

 

 

 

http://edugen.wileyplus.com/edugen/art2/common/pixel.gif

Gibbs Manufacturing Co. was incorporated on 1/2/14 but was unable to begin manufacturing activities until 8/1/14 because new factory facilities were not completed until that date. The Land and Buildings account at 12/31/14 per the books was as follows:

Date  

 

Item

 

Amount

1/31/14

 

Land and dilapidated building

 

$200,000

2/28/14

 

Cost of removing building

 

3,900

4/01/14

 

Legal fees

 

6,190

5/01/14

 

Fire insurance premium payment

 

5,112

5/01/14

 

Special tax assessment for streets

 

4,780

5/01/14

 

Partial payment of new building construction

 

188,900

8/01/14

 

Final payment on building construction

 

188,900

8/01/14

 

General expenses

 

30,800

12/31/14

 

Asset write-up

 

74,000

       

$702,582


Additional information:

1.

 

To acquire the land and building on 1/31/14, the company paid $100,000 cash and 1,000 shares of its common stock (par value = $100/share) which is very actively traded and had a fair value per share of $160.

2.

 

When the old building was removed, Gibbs paid Kwik Demolition Co. $3,900, but also received $1,460 from the sale of salvaged material.

3.

 

Legal fees covered the following:

Cost of organization

 

$2,600

Examination of title covering purchase of land

 

2,190

Legal work in connection with the building construction

 

1,400

   

$6,190

4.

 

The fire insurance premium covered premiums for a three-year term beginning May 1, 2014.

5.

 

General expenses covered the following for the period 1/2/14 to 8/1/14.

President's salary

 

$20,700

Plant superintendent covering supervision of new building

 

10,100

   

$30,800

6.

 

Because of the rising land costs, the president was sure that the land was worth at least $74,000 more than what it cost the company.


Determine the proper balances as of 12/31/14 for a separate land account and a separate buildings account.

 

Land:

 

Building:

 

 

 

Question 2:

 

Answer each of the following questions.

 

1.

 

A plant asset purchased for $400,000 has an estimated life of 10 years and a residual value of $20,000. Depreciation for the second year of use, determined by the declining-balance method at twice the straight-line rate is $http://edugen.wileyplus.com/edugen/art2/common/pixel.gif.

2.

 

A plant asset purchased for $330,000 at the beginning of the year has an estimated life of 5 years and a residual value of $30,000. Depreciation for the third year, determined by the sum-of-the-years'-digits method is $http://edugen.wileyplus.com/edugen/art2/common/pixel.gif.

3.

 

A plant asset with a cost of $320,000 and accumulated depreciation of $90,000, is given together with cash of $120,000 in exchange for a similar asset worth $330,000. The http://edugen.wileyplus.com/edugen/art2/common/pixel.gifrecognized on the disposal is $http://edugen.wileyplus.com/edugen/art2/common/pixel.gif.

4.

 

A plant asset with a cost of $270,000, estimated life of 5 years, and residual value of $45,000, is depreciated by the straight-line method. This asset is sold for $190,000 at the end of the second year of use. The http://edugen.wileyplus.com/edugen/art2/common/pixel.gifon the disposal is $http://edugen.wileyplus.com/edugen/art2/common/pixel.gif.

 

 

 

Warning

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question 3:

 

Selected amounts from Trent Company's trial balance of 12/31/14 appear below:

1.

 

Accounts Payable

 

$124,970

 

2.

 

Accounts Receivable

 

156,900

 

3.

 

Accumulated Depreciation-Equipment

 

201,980

 

4.

 

Allowance for Doubtful Accounts

 

22,840

 

5.

 

Bonds Payable

 

496,800

 

6.

 

Cash

 

146,320

 

7.

 

Common Stock

 

60,000

 

8.

 

Equipment

 

963,300

 

9.

 

Prepaid Insurance

 

28,020

 

10.

 

Interest Expense

 

11,370

 

11.

 

Inventory

 

291,900

 

12.

 

Notes Payable (due 6/1/15)

 

210,100

 

13.

 

Prepaid Rent

 

210,780

 

14.

 

Retained Earnings

 

822,500

 

15.

 

Salaries and Wages Expense

 

305,900

 


(All of the above accounts have their standard or normal debit or credit balance.)

Warning

 

Ok

  

Cancel

  

 

http://edugen.wileyplus.com/edugen/art2/common/pixel.gif

 

 

 

http://edugen.wileyplus.com/edugen/art2/common/pixel.gif

 

 

 

http://edugen.wileyplus.com/edugen/art2/common/pixel.gif

 

Prepare adjusting journal entries at year end, December 31, 2014, based on the following supplemental information. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

 

a.

 

The equipment has a useful life of 15 years with no salvage value. (Straight-line method being used.)

 

b.

 

Interest accrued on the bonds payable is $14,904 as of 12/31/14.

 

c.

 

Prepaid insurance at 12/31/14 is $24,900.

 

d.

 

The rent payment of $210,780 covered the six months from November 30, 2014 through May 31, 2015.

 

e.

 

Salaries and wages earned but unpaid at 12/31/14, $23,390.

 

 

 

 

Subject Business
Due By (Pacific Time) 12/14/2014 11:00 pm
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy