This Tutorial contains Excel File which can be used to solve for any values
Complete the following assignments in WileyPLUS:
• Brief Exercise 10-10
• Exercise 10-3
• Exercise 10-13
• Exercise 11-6
• Exercise 11-15
• Exercise 11-15 (Essay)
• Exercise 11-24
• Exercise 12-1
• Exercise 12-4
• Exercise 12-14 (Part Level Submission)
Brief Exercise 10-10
Larkspur Company traded a used welding machine (cost $10,620, accumulated depreciation $3,540) for office equipment with an estimated fair value of $5,900. Larkspur also paid $3,540 cash in the transaction.
Prepare the journal entry to record the exchange. (The exchange has commercial substance.)
Whispering Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2017. The terms of acquisition for each truck are described below.
1. Truck #1 has a list price of $31,350 and is acquired for a cash payment of $29,051.
2. Truck #2 has a list price of $33,440 and is acquired for a down payment of $4,180 cash and a zero-interest-bearing note with a face amount of $29,260. The note is due April 1, 2018. Whispering would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.
3. Truck #3 has a list price of $33,440. It is acquired in exchange for a computer system that Whispering carries in inventory. The computer system cost $25,080 and is normally sold by Whispering for $31,768. Whispering uses a perpetual inventory system.
4. Truck #4 has a list price of $29,260. It is acquired in exchange for 1,030 shares of common stock in Whispering Corporation. The stock has a par value per share of $10 and a market price of $13 per share.
Prepare the appropriate journal entries for the above transactions for Whispering Corporation.
Presented below is information related to Pronghorn Company.
1. On July 6, Pronghorn Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:
Pronghorn Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $205 per share on the date of the purchase of the property.
2. Pronghorn Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building. (Prepare consolidated entry for all transactions below.)
Repairs to building $114,890
Construction of bases for equipment to be installed later 141,980
Driveways and parking lots 124,400
Remodeling of office space in building, including new partitions and walls 147,440
Special assessment by city on land 17,540
3. On December 20, the company paid cash for equipment, $305,900, subject to a 2% cash discount, and freight on equipment of $10,100.
Sage Company purchased equipment for $231,080 on October 1, 2017. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $13,080. Estimated production is 40,000 units and estimated working hours are 20,300. During 2017, Sage uses the equipment for 520 hours and the equipment produces 1,000 units.
Compute depreciation expense under each of the following methods. Sage is on a calendar-year basis ending December 31.
Compute the depreciation charge on this equipment for 2012, for 2019, and the total charge for the period from 2013 to 2018, inclusive, under each of the six following assumptions with respect to partial periods.
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On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time, and depreciation has been computed on that basis. The company uses the straightline method of depreciation.
Following are the assumptions with respect to partial periods:
(1) Depreciation is computed for the exact period of time during which the asset is owned. (Use 365 days for the base and record depreciation through March 9, 2019.)
(2) Depreciation is computed for the full year on the January 1 balance in the asset account.
(3) Depreciation is computed for the full year on the December 31 balance in the asset account.
(4) Depreciation for one-half year is charged on plant assets acquired or disposed of during the year.
(5) Depreciation is computed on additions from the beginning of the month following acquisition and on disposals to the beginning of the month following disposal.
(6) Depreciation is computed for a full period on all assets in use for over one-half year, and no depreciation is charged on assets in use for less than one-half year. (Use 365 days for base.)
Briefly evaluate the methods above, considering them from the point of view of basic accounting theory as well as simplicity of application.
The 2014 Annual Report of Tootsie Roll Industries contains the following information.
December 31, 2014
December 31, 2013
Total assets $910.4
Total liabilities 219.3
Net sales 539.9
Net income 63.2
Compute the following ratios for Tootsie Roll for 2014.
Presented below is selected information for Cullumber Company.
Answer the questions asked about each of the factual situations.
1. Cullumber purchased a patent from Vania Co. for $1,230,000 on January 1, 2015. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2025. During 2017, Cullumber determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2017?
2. Cullumber bought a franchise from Alexander Co. on January 1, 2016, for $365,000. The carrying amount of the franchise on Alexander’s books on January 1, 2016, was $515,000. The franchise agreement had an estimated useful life of 30 years. Because Cullumber must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 2017?
3. On January 1, 2017, Cullumber incurred organization costs of $282,500. What amount of organization expense should be reported in 2017?
4. Cullumber purchased the license for distribution of a popular consumer product on January 1, 2017, for $153,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Cullumber can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2017?
Exercise 12-14 (Part Level Submission)
Presented below is net asset information related to the Skysong Division of Santana, Inc.
The purpose of the Skysong Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $425 million. Management has also received an offer to purchase the division for $330 million. All identifiable assets’ and liabilities’ book and fair value amounts are the same.