Journalize each of the following transactions: (use correct journal format - no dates) (a) A wing costing $2,345,000 was added to the building. A new mortgage was issued for the (b) cost. Equipment was upgraded to increase its capacity to produce widgets. The upgrade cost of $21,500 was paid in cash. A major overhaul costing $12,000 on a machine increased the useful life by 4 years. The company issued a note for payment...

Journalize each of the following transactions: (use correct journal format - no dates) (a) A wing costing $2,345,000 was added to the building. A new mortgage was issued for the (b) cost. Equipment was upgraded to increase its capacity to produce widgets. The upgrade cost of $21,500 was paid in cash. A major overhaul costing $12,000 on a machine increased the useful life by 4 years. The company issued a note for payment...

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 2EB: Johnson, Incorporated had the following transactions during the year: Purchased a building for...

See similar textbooks

Similar questions

Journalize each of the following transactions: (a) A wing costing $2,345,000 was added to the building. A new mortgage was issued for the cost. (b) Equipment was upgraded to increase its capacity to produce widgets. The upgrade cost of $11,500 was paid in cash. (c) A major overhaul costing $8,000 on a machine increased the useful life by 4 years. The payment was made in cash.
Assume that in January 20X6, a Hotcake House restaurant purchased a building, paying $57,000 cash and signing a $108,000 note payable. The restaurant paid another $60,000 to remodel the bui and fixtures cost $54,000, and dishes and supplies-a current asset-were obtained for $10,200. Hotcake House is depreciating the building over 20 years by the straight-line method, with estimate value of $55,000 The fumiture and fixtures will be replaced at the end of five years and are being depreciated by the double-declining-balance method, with zero residual value. At the end of the first restaurant still has dishes and supplies worth $1,900. Requirement 1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its. • Income Statement • Balance Sheet • Statement of Cash Flows (investing only) Note The purchase of dishes and supplies is an operating cash flow because supplies are a current asset. Requirement 1. Show what the restaurant will report…
Several years ago, Health Services acquired a helicopter for use in emergency situations. Health Services incurred the following expenditures related to the helicopter delivery operations in the current year:1. Overhauled the engine at a cost of $7,500. Health Services estimated the work would increase the service life for an additional five years.2. Cleaned, repacked, and sealed the bearings on the helicopter at a cost of $800. This repair is performed annually.3. Added new emergency health equipment to the helicopter for $25,000.4. Modified the helicopter to reduce cabin noise by installing new sound barrier technology at a cost of $15,000.5. Paid insurance on the helicopter for the current year, which increased 15% over the prior year to $9,000.6. Performed annual maintenance and repairs at a cost of $39,000.Required:Indicate whether Health Services should capitalize or expense each of these expenditures. How could Health Services use expenditures like these to increase reported…
Houston’s Shredding Service has just completed a minor repair on a shredding machine. The repair cost was $1,010, and the book value prior to the repair was $4,750. In addition, the company spent $6,000 to replace the roof on a building. The new roof extended the life of the building by five years. Prior to the roof replacement, the general ledger reflected the Building account at $89,300 and related Accumulated Depreciation account at $44,300. After the work was completed, what book value should Houston’s report on the balance sheet for the shredding machine and the building? Book Value Shreddding Machine Building
Jada Company had the following transactions during the year: • Purchased a machine for $500,000 using a long-term note to finance it • Paid $1,000 for ordinary repair • Purchased a patent for $42,000 cash • Paid $210,000 cash for addition to an existing building • Paid $55,000 for monthly salaries • Paid $300 for routine maintenance on equipment • Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year? Capitalized $4 Expensed
Required information (The following information applies to the questions displayed below) Precision Construction entered into the following transactions during a recent year. January 2 Purchased a bulldozer for $250, e00 by paying $20,000 cash and signing a $23a, 00e note due in five years. January 3 Replaced the steel tracks on the bulldozer at a cost of $2e,0e0, purchased on account. The new steel tracks increase the bulldozer's operating efficiency. January 30 Wrote a check for the amount owed on account for the work conpleted on January 3. February 1 Repaired the leather seat on the bulldozer and wrote a check for the full $800 cost. March 1 Paid $3,600 cash for the rights to use computer software for a two-year period. Required: 1-a. Complete the table below, for the above transactions. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) Stockholders' Equity Date Assets Llabilities January 02 January 02 January 03 January 30 February 01 March…
The Hartley Clinic purchased a new surgical laser for $90,000. The estimated salvage value is $5,000. The laser has a useful life of five years and the clinic expects to use it 10,000 hours. It was used 1,600 hours in year 1; 2,200 hours in year 2; 2,400 hours in year 3; 1,800 hours in year 4; 2,000 hours in year 5. Compute the annual depreciation for each of the five years under straight-line and units-of-activity methods. Straight-line Units-of-Activity Year 1 $enter a dollar amount $enter a dollar amount Year 2 enter a dollar amount enter a dollar amount Year 3 enter a dollar amount enter a dollar amount Year 4 enter a dollar amount enter a dollar amount Year 5 enter a dollar amount enter a dollar amount Total $enter a total amount $enter a total amount ^^^ Use this format.
Required information [The following information applies to the questions displayed below.] At the beginning of the year, Tangerine Incorporated bought a shed, a machine, and a trailer. The shed initially cost $21,500 but had to be renovated at a cost of $780. The shed was expected to last 7 years, with a residual value of $2,050. Repairs costing $600 were incurred at the end of the first year of use. The machine cost $11,850, and is estimated to have a total life of 40,000 hours and residual value of $900. The machine was actually used 2,000 hours in year 1 and 4,000 hours in year 2. The trailer cost $12,500 and was expected to last 4 years, with a residual value of $2,000. Required: 1. Compute the amount to be capitalized for the shed. Total cost
Oki Company pays $264,000 for equipment expected to last four years and have a $29,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $22,000 cash for a new component that increased the equipment’s productivity. 2. Paid $6,250 cash for minor repairs necessary to keep the equipment working well. 3. Paid $14,870 cash for significant repairs to increase the useful life of the equipment from four to seven years.
Pearl Co. recently installed some new computer equipment. To prepare for the installation, Pearl had some electrical work done in what was to become the server room, costing $23,700. The invoice price of the server equipment was $191,000. Three printers were also purchased at a cost of $1,900 each. The software for the system was an additional $43,000. The server equipment was believed to have a useful life of eight years, but due to the heavy anticipated usage, the printers were expected to have only a four-year useful life. The software to run the system was estimated to require a complete upgrade in five years to avoid obsolescence. Additionally, delivery costs of $12,900 was incurred for all items above. All of the above costs were subject to a 6% non-refundable provincial sales tax. During the installation, a training course was conducted for the staff that would be using the new equipment, at a cost of $9,850. Assume that Pearl follows IFRS, and that any allocation of common…
Jada Company had the following transactions during the year:• Purchased a machine for $500,000 using a long-term note to finance it• Paid $500 for ordinary repair• Purchased a patent for $45,000 cash• Paid $200,000 cash for addition to an existing building• Paid $60,000 for monthly salaries• Paid $250 for routine maintenance on equipment• Paid $10,000 for major repairs• Depreciation expense recorded for the year is $25,000If all transactions were recorded properly, what is the amount of increase to the Property, Plant, andEquipment section of Jada’s balance sheet resulting from this year’s transactions? What amount did Jadareport on the income statement for expenses for the year?
Bill’s Wrecker Service has just completed a minor repair on a tow truck. The repair cost was $1,550, and the book value prior to the repair was $6,500. In addition, the company spent $12,000 to replace the roof on a building. The new roof extended the life of the building by five years. Prior to the roof replacement, the general ledger reflected the Building account at $85,000 and related Accumulated Depreciation account at $32,000. Required After the work was completed, what book value should appear on the balance sheet for the tow truck and the building? TOW TRUCK: Building: