ACCT 2402 Introduction To Mang..

1.

value:
1.00 points

Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $10,000. The estimated useful life was four years, and the residual value was $1,000. Assume that the estimated productive life of the machine was 9,000 hours. Actual annual usage was 3,600 hours in year 1; 2,700 hours in year 2; 1,800 hours in year 3; and 900 hours in year 4.
Required:
1.Complete a separate depreciation schedule for each of the alternative methods. (Round your answers to the nearest dollar amount. Omit the “$” sign in your response.)
a.Straight-line.
YearDepreciation
Expense
Accumulated
Depreciation
Net
Book Value
At acquisition  $ [removed]   
1$ [removed]   $ [removed]   [removed]   
2[removed]   [removed]   [removed]   
3[removed]   [removed]   [removed]   
4[removed]   [removed]   [removed]   
b.Units-of-production (use four decimal places for the per unit output factor).
YearDepreciation
Expense
Accumulated
Depreciation
Net
Book Value
At acquisition  $ [removed]   
1$ [removed]   $ [removed]   [removed]   
2[removed]   [removed]   [removed]   
3[removed]   [removed]   [removed]   
4[removed]   [removed]   [removed]   
c.Double-declining-balance.
YearDepreciation
Expense
Accumulated
Depreciation
Net
Book Value
At acquisition  $ [removed]   
1$ [removed]   $ [removed]   [removed]   
2[removed]   [removed]   [removed]   
3[removed]   [removed]   [removed]   
4[removed]   [removed]   [removed]   

eBook Linkreferences

2.

value:
1.00 points

Trotman Company had three intangible assets at the end of 2012 (end of the accounting year):
a.Computer software and Web development technology purchased on January 1, 2011, for $70,000. The technology is expected to have a four-year useful life to the company.
b.A patent purchased from Ian Zimmer on January 1, 2011, for a cash cost of $6,000. Zimmer had registered the patent with the U.S. Patent Office five years ago.
c.An internally developed trademark registered with the federal government for $13,000 on November 1, 2012. Management decided the trademark has an indefinite life.
Required:
1.Compute the acquisition cost of each intangible asset. (Omit the “$” sign in your response.)
 Acquisition cost
  Technology$ [removed] 
  Patent[removed] 
  Trademark[removed] 
2.Compute the amortization of each intangible at December 31, 2012. The company does not use contra-accounts. (Assume the company uses straight-line method.) (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)
 Amortization
  Technology$ [removed] 
  Patent[removed] 
  Trademark[removed] 
3.Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2012. (Omit the “$” sign in your response.)
   
  Income statement for 2012:  
     Operating expenses:  
           $ [removed] 
  
   
  Balance sheet at December 31, 2012:  
     (under noncurrent assets)  
       Intangibles:  
          $ [removed] 
          [removed] 
          [removed] 
  
  $ [removed] 
  

eBook LinkView Hint #1references

 3.

value:
1.00 points

You are a financial analyst for Ford Motor Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $106,000. The estimated useful life is 13 years, and the estimated residual value is $2,000. The machine has an estimated useful life in productive output of 200,000 units. Actual output was 20,000 in year 1 and 16,000 in year 2.
Required:
1.For years 1 and 2 only, prepare separate depreciation schedules assuming:
a.Straight-line method. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the “$” sign in your response.)
YearDepreciation
Expense
Accumulated
Depreciation
Net
Book Value
At acquisition  $ [removed]   
1$ [removed]   $ [removed]   [removed]   
2$ [removed]   [removed]   [removed]   
b.Units-of-production method. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the “$” sign in your response.)
YearDepreciation
Expense
Accumulated
Depreciation
Net
Book Value
At acquisition  $ [removed]   
1$ [removed]   $ [removed]   [removed]   
2[removed]   [removed]   [removed]   
c.Double-declining-balance method. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the “$” sign in your response.)
YearDepreciation
Expense
Accumulated
Depreciation
Net
Book Value
At acquisition  $ [removed]   
1$ [removed]   $ [removed]   [removed]   
2[removed]   [removed]   [removed]   
During 2012, Jensen Company disposed of three different assets. On January 1, 2012, prior to their disposal, the accounts reflected the following:
AssetOriginal
Cost
Residual
Value
Estimated
Life
Accumulated
Depreciation
(straight line)
   Machine A$21,000  $3,000   8 years$13,500 (6 years)    
   Machine B 41,000   4,000   10 years  29,600 (8 years)    
   Machine C 75,000   5,000   15 years  56,000 (12 years)  
The machines were disposed of in the following ways:
a.Machine A: Sold on January 1, 2012, for $7,200 cash.
b.Machine B: Sold on December 31, 2012, for $8,500; received cash, $2,500, and a $6,000 interest bearing (12 percent) note receivable due at the end of 12 months.
c.Machine C: On January 1, 2012, this machine suffered irreparable damage from an accident. On January 10, 2012, a salvage company removed the machine at no cost.

 4.

value:
1.00 points

Required:
1.Give all journal entries related to the disposal of each machine in 2012. (Leave no cells blank – be certain to enter “0” wherever required. In cases where no entry is required, please select the option “No journal entry required” for your answer to grade correctly. Omit the “$” sign in your response.)
Machine A
General JournalDebitCredit
  [removed]   
        [removed]   
   
    [removed]    
    [removed]    
  [removed]   
        [removed]   
Machine B
General JournalDebitCredit
  [removed]   
        [removed]   
   
    [removed]    
    [removed]    
  [removed]   
        [removed]   
        [removed]   
Machine C
General JournalDebitCredit
  [removed]   
        [removed]   
   
    [removed]    
    [removed]    
        [removed]   

eBook Links (2)references

 5.

value:
1.00 points

2.Explain the accounting rationale for the way that you recorded each disposal.
 Machine A:  Disposal of a long-lived asset with the price below net book value results in a
  
 Machine B:  Disposal of a long-lived asset with the price above net book value results in a
  
 Machine C:  Disposal of a long-lived asset due to damage results in a remaining book value.

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