Exam 1: Property, plant and Equipment Intangibles

On April 1,2020,Thunderbird Co sold a piece of equipment that had cost $35,000 on January 1,2011.The equipment had a residual value of $5,000,a useful life 10 years,and double-declining-balance depreciation at twice the straight-line rate was used.On December 31,2019,accumulated depreciation was $20,664.The asset was sold for $14,200.Prepare the journal entry to record depreciation up to the date of disposal of the equipment,and the journal entry to record the disposal of the equipment.

Danner Co.purchased a computer on January 1,2019,for $1,600,000.The straight-line method of depreciation was used,based on an expected life of 6 years and a residual value of $130,000.Prepare the journal entries to record depreciation for the first 6 months of 2021 and the sale of the computer on July 1,2021,for $1,000,000.

RoboCop Company paid $31,400 for a machine that was expected to last 5 years and have a residual value of $5,000.During the fourth year of the machine's life,$5,400 was paid for repairs that were expected to increase the service life of the machine from 5 to 7 years.Prepare the general journal entry to record this transaction.

On January 1, 2023, PetraCo ordered a new machine to help increase production for one of its most popular products. The machine had an invoice price of $30,000 and PetraCo was required to pay shipping ($1,200) and insurance during shipping ($300) by boat from British Columbia to Toronto. The machine arrived on January 5, 2019 and was installed at a cost of $800 and calibrated and tested for a cost of $200. On February 1, 2019 it was put into operation. PetraCo's fiscal year runs from January to December. Round all final answers to the nearest dollar. -Petra Co.sold the machine on July 1,2020 for $19,000.Prepare all journal entries required by HRO in 2020 relating to the machine and its disposal.

On January 1,2019,Friar Company purchased a machine for $180,000 that was expected to last 6 years and have a residual value of $16,000.On January 4,2022,Friar Company paid $25,000 for improvements to the machine,which increased the total estimated useful life from 6 to 10 years and increased the residual value to $19,500.Friar uses straight-line depreciation.(1)What account should be debited in the journal entry to record the $25,000 improvements? (2)What amount of depreciation expense should be recorded for 2022?

Primadonna Company paid $870,000 plus $10,000 in legal costs for a parcel of real estate.This included land appraised at $450,000; land improvements appraised at $170,000; and a building appraised at $380,000.The plan is to use the building as a manufacturing plant.Determine the amounts that should be debited to: (a) Land \_\_ (b) Land Improvements \_\_ (c) Building \_\_

When accumulated depreciation equals the asset's cost,the asset is fully depreciated.The entry to record the removal of the asset is called exchanging the equipment.

Hawaii Kai purchased a leasehold property for $8,500,000.The leasehold expires in 15 years.Prepare the journal entry to record the first year's depreciation expense.

Machinery after two years worth of depreciation has an opening book value of $6,400.At the beginning of the third year,the predicted number of years remaining in its useful life changes from three years to four years and its estimated residual value changes from the original $1,000 to $400.The revised annual depreciation using the straight-line method is $1,500.

SportsWorld uses straight-line depreciation for a piece of equipment that cost $12,000,had a trade-in value of $2,000,and a five-year service life.At the end of the third year,the trade-in value was revised to $1,200 and the useful life increased to a total of 6 years.Calculate the amount of depreciation expense for each of the remaining years of the asset's useful life.

Mandy Manufacturing purchased a machine on August 1,2019,and it was installed and ready to run on January 1,2020.The following costs were incurred in the purchase and installation of the machine. Invoice Price \ 1,400,000 Freight costs 8,000 Purchase discount 3,000 Installation costs 68,000 Electrical and power connections 33,000 Repairs to correct damage incurred during uncrating 13,000 Adjustments costs 46,000 Spare parts for future use 26,000 Provincial sales tax 84,000 Fines incurred during the transport and uploading of the machine 100 Cost of special foundation for the machine 7,000 Calculate the depreciable cost of the machine.

When assigning values to an exchange of assets you should use the fair value of the asset given up.

A machine was purchased for $37,000 and depreciated for 5 years on a straight-line basis under the assumption it would have a 10-year life and a $1,000 residual value.At the beginning of the machine's sixth year,it was recognized that it had 3 years of remaining life left,instead of five,and that at the end of the 3 years its residual value would be $1,600.What should the annual depreciation be for the machine's remaining years?

Intangible assets do not include

Goodwill is an intangible asset.

A machine that cost $40,000 and had accumulated depreciation of $30,000 was traded in on a new machine,which had an estimated 20-year life and a cash price of $50,000.If a $7,000 trade-in allowance was received on the old machine,the new machine should be valued at

GenX Music purchased a music distributor's collection of songs for $1,423,000.The copyrights are expected to last another 34 years.Prepare the journal entry to record the amortization expense for the first year. Amortization Expersse, Copyrights 41,853 Accurmulated Amortization, 41,853 Copyrights

Obsolescence

A machine originally had an estimated service life of 5 years,and after 3 years,it was decided that the original estimate should have been for 10 years.The remaining cost to be depreciated should be allocated over the next

The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use.