For “accountsguru” only

Accounting Homework

1. Strike Bowling installs automatic scorekeeping equipment with an invoice cost of $180,000. The electrical work required for the installation costs $8,000. Additional costs are $3,000 for delivery and $12, 600 for sales tax. During the installation, a component of the equipment is carelessly left on a lane and hit by the automatic lane-cleaning machine. The cost of repairing the component is $2,250. What is the total recorded cost of the automatic scorekeeping equipment?

2. On January 2, 2011, the Crossover Band acquires sound equipment for concert performances at a cost of $55,900. The band estimates it will use this equipment for four years, during which time it anticipates performing about 120 concerts. It estimates that after four years it can sell the equipment for $1,900. During year 2011, the band performs 40 concerts. Compute the year 2011 depreciation using the straight-line method.

3. Refer to the information in question #2. Compute the year 2011 depreciation using the units-of-production method.

4. A fleet of refrigerated delivery trucks is acquired on January 5, 2011, at a cost of $930,000 with an estimated useful life of eight years and an estimated salvage value of $150,000. Compute the depreciation expense for the first three years using the double-declining-balance method.

5. In recent years Singh Company has purchased five machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.

Compute depreciation under

different methods.

Salvage Useful Life

Machine Acquired Cost Value (in years) Depreciation Method

1 July 1, 2008 $68,000 $5,000 7 Straight-line

2 Apr. 1, 2009 60,000 6,000 4 Declining-balance

3 Sept. 1, 2009 84,000 4,000 8 Units-of-activity

4 Jan. 1, 2010 100,000 9,000 10 Declining balance

5 Dec. 1 2011 50,000 2,000 4 Straight line

For the declining-balance method, Singh Company uses the double-declining rate. For

the units-of-activity method, total machine hours are expected to be 40,000. Actual hours

of use in the first 3 years were: 2009, 1,200; 2010, 6,400; and 2011, 7,000.

Instructions

(a) Compute the amount of accumulated depreciation on each machine at December 31, 2011. Don’t forget to deal with partial years.

P11-

0

1A

Bank

s:

of the note

Maturity date
0 0 0

rate

0 0 0

:

0

:

Total interest for note

0
TYTUS CO.

Date

0

Accounts Payable – Frier

0

0

-day,

note to extend due date on account.

Cash

0

-day, 10% note.

Notes Payable – Frier

Cash 0

Interest Expense

Notes Payable – Community

Cash 0
Paid note with interest.

Cash

0

-day,

note.

Interest Expense

0

Interest Expense

Notes Payable – UMB Bank
Interest Payable

Cash 0
Paid note with interest.

Student Name:

Class:

Problem 11-01A

TYTUS CO.

Schedule

Community

UMB

Frier

Bank

1.

Maturity date

Date

Term of the note (in days)

2.

Interest due at maturity:

Principal of the note

Annual interest

Fraction of year

Interest expense

3.

Accrued interest on UMB note at end of

2010

Total interest for note

Fraction of term in 2010

Accrued interest expense

4.

Interest on UMB note for

2011

Fraction of term in 2011

Interest expense in 2011

General Journal

Account Titles

Debit

Credit

2010.0

Apr 20

Merchandise Inventory

Accounts Payable – Frier

Purchased merchandise on credit.

May 19

Cash

Notes Payable – Frier

Paid $8,500 cash and gave a

90

9%

Jul 8

Notes Payable – Community

Borrowed cash with a

120

Aug 17

Interest Expense

Paid note with interest.

Nov 5

Nov 28

Notes Payable – UMB Bank

Borrowed cash with

60

8%

Dec 31

Interest Payable

Accrued interest on note payable.

2011.0

Jan 27

Enter appropriate data in yellow cells. Your entries for “Maturity date” will be verified.
Enter appropriate data in yellow cells. Your entries for “Interest expense” will be verified.
Enter appropriate data in yellow cells. Your entries for “Accrued interest expense” will be verified.
Enter appropriate data in yellow cells. Your entries for “Interest expense in 2009” will be verified.
Enter appropriate data in yellow cells. Your Credit entries will be verified.

Given P11-01A

TYTUS CO.

2010
Apr 20

May 19

90

Annual interest 9%
Jul 8

Term in days 120
Annual interest

?

?

?

Nov 28

Term in days 60
Annual interest 8%

$ 21,000

Dec 31

?

2011
?

?

Given Data P11-01A:
Credit purchase from Frier	$ 38,500
Replaced Frier payable with note
		Term in days
Cash paid	$ 8,500
Balance of note	$ 30,000
Borrowed from Community Bank
10.0%
Amount of note	$ 60,000
						?	Paid note to Frier at maturity
Paid note to Community Bank at maturity
Signed interest-bearing note from UMB Bank
Cash borrowed		$ 21,000
Face value
Entered adjusting entry for interest
accrued on note to UMB Bank
Paid note to UMB Bank at maturity
Check figures:
(2) Frier	$ 675
(3)	$ 154
(4)	$ 126