ACCT 211 Connect Homework Chapter 8 Problems Liberty University Solution

Question 1

Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2017, at a total cash price of $830,000 for a building, land, land improvements, and four vehicles.

1-a. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased.

3. Compute the depreciation expense for year 2017 on the land improvements assuming a five-year life and double-declining-balance depreciation.

Question 2

A machine costing $212,600 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 489,000 units of product during its life.

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)

Question 3

In January 2017, Mitzu Co. pays $2,700,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $732,000, with a useful life of 20 years and a $90,000 salvage value.

1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.

Question 4

2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2017.

Question 5

3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2017 when these assets were in use.

Question 6

Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.

Question 7

Yoshi Company completed the following transactions and events involving its delivery trucks.

1-a. Calculate depreciation for year 2017.

1-b. Calculate book value and gain (loss) for sale of Truck on December, 2018.

1-c. Prepare journal entries to record these transactions and events.

Question 8

Onslow Co. purchases a used machine for $240,000 cash on January 2 and readies it for use the next day at a $8,000 cost.

1. Prepare journal entries to record the machine's purchase and the costs to ready and install it. Cash is paid for all costs incurred.

Question 9

2. Prepare journal entries to record depreciation of the machine at December 31.

Question 10

3. Prepare journal entries to record the machine's disposal under each of the following separate assumptions:

Question 11

On July 23 of the current year, Dakota Mining Co. pays $7,155,600 for land estimated to contain 8,040,000 tons of recoverable ore.

Question 12

On July 1, 2012, Falk Company signed a contract to lease space in a building for 20 years. The lease contract calls for annual (prepaid) rental payments of $80,000 on each July 1 throughout the life of the lease and for the lessee to pay for all additions and improvements to the leased property.

Question 13

2. Prepare Ryan’s year-end adjusting entries required at December 31, 2017, to (a) amortize the $240,000 cost of the sublease, (b) amortize the office improvements, and (c) record rent expense.