Resources: Ch. 9 of Financial Accounting
Complete Exercise E9-2, E9-7, & E9-12.
Complete Problem P9-2A.
Submit as a Microsoft® Excel® or Word document E9-2 Trudy Company incurred the following costs.
1. Sales tax on factory machinery purchased $ 5,000
2. Painting of and lettering on truck immediately upon purchase 700
3. Installation and testing of factory machinery 2,000
4. Real estate broker’s commission on land purchased 3,500
5. Insurance premium paid for first year’s insurance on new truck 880
6. Cost of landscaping on property purchased 7,200
7. Cost of paving parking lot for new building constructed 17,900
8. Cost of clearing, draining, and filling land 13,300
9. Architect’s fees on self-constructed building 10,000
Instructions
Indicate to which account Trudy would debit each of the costs
E9-7 Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011.The truck
has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2011 and 12,000 in 2012.
so on ...
E9-12 The following are selected 2011 transactions of Franco Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.
May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
Instructions
Prepare necessary adjusting entries at December 31 to record amortization required by the
events above.
P9-2A In recent years, Juresic Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is summarized below.
Salvage Useful Life
Bus Acquired Cost Value in Years Depreciation Method
1 1/1/09 $ 96,000 $ 6,000 5 Straight-line
2 1/1/09 120,000 10,000 4 Declining-balance
3 1/1/10 80,000 8,000 5 Units-of-activity
so on ....
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