Help me please.
#1: Benedict Company incurred the following costs.
1. Sales tax on factory machinery purchased $ 5,000
2. Painting of and lettering on truck immediately upon purchase
700
3. Installation and testing of factory machinery 2,000
4. Real estate broker’s commission on land purchased 3,500
5. Insurance premium paid for fi rst year’s insurance on new truck
880
6. Cost of landscaping on property purchased 7,200
7. Cost of paving parking lot for new building constructed
17,900
8. Cost of clearing, draining, and fi lling land 13,300
9. Architect’s fees on self-constructed building 10,000
Indicate to which account Benedict would debit each of the
costs.
Exercise #2: On March 1, 2019, Westmorlan Company acquired real
estate on which it planned to construct a small offi ce building.
The company paid $75,000 in cash. An old warehouse on the property
was razed at a cost of $8,600; the salvaged materials were sold for
$1,700. Additional expenditures before construction began included
$1,100 attorney’s fee for work concerning the land purchase, $5,000
real estate broker’s fee, $7,800 architect’s fee, and $14,000 to
put in driveways and a parking lot.
Instructions
(a) Determine the amount to be reported as the cost of the
land.
(b) For each cost not used in part (a), indicate the account to be
debited.
Exercise #3: Linton Company purchased a delivery truck for $34,000
on January 1, 2019. The truck has an expected salvage value of
$2,000, and is expected to be driven 100,000 miles over its
estimated useful life of 8 years. Actual miles driven were 15,000
in 2019 and 12,000 in 2020.
Instructions
(a) Compute depreciation expense for 2019 and 2020 using (1) the
straight-line method, (2) the units-of-activity method, and (3) the
double-declining-balance method.
(b) Assume that Linton uses the straight-line method.
(1) Prepare the journal entry to record 2019 depreciation.
(2) Show how the truck would be reported in the December 31, 2019,
balance sheet.
Dear student, we cannot able to post solution more than one question as per our policy. |
No. | Transaction | Debited Account | Hint(s) |
1 | Sales tax on factory machinery purchased $ 5,000 | Factory Machinery | Sales tax on factory machinery should be capitalized to factory machinery. |
2 | Painting of and lettering on truck immediately upon purchase 700 | Truck | Painting of and lettering on truck immediately upon purchase should be capitalized to truck. |
3 | Installation and testing of factory machinery 2,000 | Factory Machinery | Installation and testing of factory machinery should be capitalized to factory machinery. |
4 | Real estate broker’s commission on land purchased 3,500 | Land | Real estate broker’s commission on land should be capitalized to land. |
5 | Insurance premium paid for first year’s insurance on new truck 880 | Prepaid Insurance | It is not capital nature expense. Hence, This cost should not be capitalized. (Hint: Prepaid Insurance) |
6 | Cost of landscaping on property purchased 7,200 | Land Improvements | Land Improvements cost should be include the Cost of landscaping and Cost of paving parking lot. |
7 | Cost of paving parking lot for new building constructed 17,900 | Land Improvements | Land Improvements cost should be include the Cost of landscaping and Cost of paving parking lot. |
8 | Cost of clearing, draining, and filling land 13,300 | Land | Cost of clearing, draining, and filling land should be capitalized to land. |
9 | Architect’s fees on self-constructed building 10,000 | Building | Architect’s fees on self-constructed building should be capitalized to building. |
Help me please. #1: Benedict Company incurred the following costs. 1. Sales tax on factory machinery...
d E9.2 (LO 1) Benedict Company incurred the following costs. $ 5,000 1. Sales tax on factory machinery purchased 2. Painting of and lettering on truck immediately upon purchase 3. Installation and testing of factory machinery 700 oorardto 2,000 4. Real estate broker's commission on land purchased 3,500 5. Insurance premium paid for first year's insurance on new truck 880 6. Cost of landscaping on property purchased 7,200 7. Cost of paving parking lot for new building constructed 8. Cost...
Determine property, plant, and equipment costs. (LO 1) E10-2 Benedict Company incurred the following costs. 1. Sales tax on factory machinery purchased 2. Painting of and lettering on truck immediately upon purchase 3. Installation and testing of factory machinery 4. Real estate broker's commission on land purchased Insurance premium paid for first year's insurance on new truck 6. Cost of landscaping on property purchased 7. Cost of paving parking lot for new building constructed 8. Cost of clearing, draining, and...
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