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Calibri 12 2 Wrap Text ру mat Painter 12 AA == 18-a.A- BIU Merge & Center Td Font Alignment 21 B с о Е F G H к Brown Company
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Clipboard Font J16 X for А B D E с Brown Company GENERAL JOURNAL Dec. 2019 Description PR Debit Credit Page 1 Required Jnl. E
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Answer #1

Journal entries has been done below and all the calculations are given in working notes after journal entries. Also single account for Depreciation and amortization is used to shorten the answer.

In the books if Brown Company
Journal Entries
SR. No. Date Particulars Debit $ Credit $
1 Jan 1, 2019 Land A/C - Dr 600000
Building A/C - Dr 500000
Machinery A/C -Dr 900000
Patent A/C - Dr 500000
Goodwill A/C -Dr 1000000
To Capital A/C 3500000
(Being Assets of a coffee company purchased. Paid $1,000,000 extra which will be treated as goodwill)
2 Dec31,2019 Depreciation & Amortization A/C - Dr 173750
(See WN-1) To Building A/C 11250
To Machinery A/C 162000
(Being Assets Depreciated , See working note- 1 for calculations)
3 Dec31,2019 Loss on Patent Impairment A/C -Dr 400000
To Patent 400000
(Being patent value reduced to $100000)
Dec31,2019 Depreciation & Amortization A/C - Dr 3333
To Patent A/C 3333
(Being Patent Depreciated , See working note- 2 for calculations)
4 Dec31,2020 Depreciation & Amortization - Dr 257583
(For understanding) To Building A/C 11250
To Machinery A/C 243000
To Patent A/C 3333
(Being Assets Depreciated , See working note- 1 for calculations)
5 Dec 2 ,2021 Depreciation & Amortization - Dr 81000
To Machinery A/C 81000
(Being Assets Depreciated , See working note- 3 for calculations)
Dec 2 ,2021 Machinery A/C -Dr 403200
Loss on Trade Off 10800
To Machinery A/C 414000
(Being old machinery traded off with a loss)
6 Dec31,2021 Depreciation & Amortization - Dr 24461
To Building A/C 11250
To Patent A/C 3333
To Machinery A/C (See WN-4) 9878
(Being assets depreciated)
7 Dec31,2022 Depreciation & Amortization - Dr 34340
To Building A/C 11250
To Patent A/C 3333
To Machinery A/C (See WN-3) 19757
(Being assets depreciated)
8 Aug 14, 2023 Machinery A/C -Dr 100000
To Cash A/C 100000
(Being machinery addition made)
9 Dec31,2023 Depreciation & Amortization - Dr 34340
To Building A/C 11250
To Patent A/C 3333
To Machinery A/C (See WN-3) 19757
(Being assets depreciated)
Depreciation & Amortization - Dr 1500
To Machinery A/C (Newly added part See WN-4) 1500
WN -1
Depreciation on Building = (Cost - Salvage Value ) / Useful life
(500000-50000) / 40
11250
Depreciation on Machinery = (No. of units produced / Total units life) x (Cost - Salvage Value)
2019= (40000/200000) x (900000-90000)
162000
2020= (60000/200000) x (900000-90000)
243000
2011= (20000/200000) x (900000-90000)
81000
WN-2
Amortization of Patent = Fair Value / useful life
100000/30
3333 rounded off
WN- 3
Depreciation on new Machinery = (Cost - Salvage Value ) / Useful life
(403200-8064)/20
19756.8
For 2021 since used less than half a year so half depreciation will be charged 9878.4 or 9878 rounded
WN-4
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