Trenton Company Essay Sample
On January 1. 2010. Trenton Company purchased a machine bing $ 50. 000. Trenton besides incurred the undermentioned costs: transit. $ 1. 000 ; installing. $ 2. 000 ; and gross revenues revenue enhancement. $ 3. 000. Fix the journal entry to enter the machine acquisition presuming hard currency was paid.
Exercise 2:
Hi-Crest Company purchased a machine on January 1. 2010. for $ 300. 000. The machine has an estimated utile life of 5 old ages and a $ 10. 000 residuary value. Calculate depreciation disbursal and the year-end book value for 2010 and 2011 utilizing the dual declining-balance method of depreciation.
* $ 120. 000 = $ 300. 000 2/5
** $ 72. 000 = $ 180. 000 2/5
Exercise 3:
Hubbard Company purchased a truck on January 1. 2009. at a cost of $ 34. 000. The company estimated that the truck would hold a utile life of 4 old ages and a residuary value of $ 4. 000. A. Calculate depreciation disbursal under consecutive line and dual worsening balance for 2009-2012. B. Which of the two methods would ensue in lower net income in 2010 and 2012? A.
Straight-line: ( $ 34. 000 – 4. 000 ) /4 old ages = $ 7. 500
Declining-balance:
2009 ? x 200 % ten $ 34. 000 = $ 17. 000
2010 ? x 200 % x ( $ 34. 000 – $ 17. 000 ) = $ 8. 500
2008 ? x 200 % x ( $ 34. 000 – $ 25. 500 ) = $ 4. 250
2009 Book value $ 4. 250 – $ 4. 000 mark book value = $ 250
B. Lower net income: 2010. dual declining-balance ; 2012. straight-line. Exercise 4:
Beckworth Company purchased a truck on January 1. 2009. at a hard currency cost of $ 10. 600. The estimated residuary value was $ 400 and the estimated utile life 4 old ages. The company uses straight-line depreciation computed monthly. On July 1. 2012. the company sold the truck for $ 1. 900 hard currency. A. What was the depreciation disbursal sum per month?
B. What was the sum of accrued depreciation at July 1. 2012? C. Give the needed diary entries on the day of the month of disposal. July 1. 2012. ( Assume no 2012 depreciation had yet been recorded )
Exercise 5:
Bennett Corporation sold a piece of equipment on June 30. 2012 for $ 50. 000 hard currency. The equipment had been purchased on January 1. 2008 for $ 150. 000. It had an estimated utile life of 6 old ages and a $ 30. 000 residuary value. Bennett Corp. has been utilizing the straight-line method of depreciation and has a year-end of December 31st. Fix any necessary diary entries on June 30. 2012 presuming that 2012 depreciation disbursal has non been recorded.
* [ ( $ 150. 000 – $ 30. 000 ) 6 ] 6/12
** [ ( $ 150. 000 – $ 30. 000 ) 6 ] 4. 5 old ages
Exercise 6:
Spa Sources Corporation purchased a machine that had an original cost of $ 60. 000 and an estimated residuary value of $ 10. 000. The utile life was expected to be 8 old ages and straight-line depreciation is used. At the terminal of 2010. the book value of the machine was $ 35. 000. Spa Sources sold the machine for $ 32. 000 hard currency on October 1. 2011. A. Fix the journal entry to enter depreciation for 2011 up to the day of the month of sale. B. Fix the journal entry to enter the sale of the machine.
Exercise 7:
Give the needed adjusting journal entry at December 31. 2011. the terminal of the one-year accounting period for the three points below. Assume that no seting entries have been made during the twelvemonth. If no entry is required. explicate why. A. Polk Company acquired a patent that cost $ 6. 000 on January 1. 2011. The patent was registered on January 1. 2006. The utile life of a patent is 20 old ages from enrollment. B. Polk Company acquired a crushed rock cavity on January 1. 2011. that cost $ 24. 000. The company estimates that 30. 000 dozenss of crushed rock can be extracted economically. During 2011 4. 000 dozenss were extracted and sold. C. On January 1. 2011. Polk Company acquired a used shit truck that cost $ 6. 000 to utilize haling crushed rock. The company estimated a residuary value of 10 % of cost and a utile life 4 old ages. The company uses straight-line depreciation.
