ACC291 Week 2 E8-3 BE9-13 Do it!9-4 E9-9 E9-10 P9-5A

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ACC291 Week 2 E8-3 BE9-13 Do it!9-4 E9-9 E9-10 P9-5A
 
Exercise E8-3 (in Class)
Exercise BE9-13
Exercise Do It! 9-4
Exercise E9-9
Exercise E9-10
Problem P9-5A
 
 
E8-3 The ledger of Hixson Company at the end of the current year shows Accounts Receivable $120,000, Sales $840,000, and Sales Returns and Allowances $30,000.
 
Instructions 
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is uncollectible.
 
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.
 
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable.
 
 
BE9-13 Information related to plant assets, natural resources, and intangibles at the end of 2011 for Spain Company is as follows: buildings $1,100,000; accumulated depreciation—buildings $650,000; goodwill $410,000; coal mine $500,000; accumulated depletion—coal mine $108,000.
 
Prepare a partial balance sheet of Spain Company for these items.
 
 
Do it! 9-4 Match the statement with the term most directly associated with it.
 
(a) Goodwill                                        (d) Amortization
(b) Intangible assets                            (e) Franchise
(c) Research and development costs
 
1. ______ Rights, privileges, and competitive advantages that result from the ownership of long lived assets that do not possess physical substance.
 
2. ______ The allocation of the cost of an intangible asset to expense in a rational and systematic manner.
 
3. ______ A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area.
 
4. ______ Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.
 
5. ______ The excess of the cost of a company over the fair market value of the net assets acquired.

E9-9 Presented below are selected transactions at Ingles Company for 2011.
 
Jan. 1 Retired a piece of machinery that was purchased on January 1, 2001.The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.
 
June 30 Sold a computer that was purchased on January 1, 2008.The computer cost $40,000. It had a useful life of 5 years with no salvage value.The computer was sold for $14,000.
 
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2007. The truck cost $39,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.
 
Instructions
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ingles Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2010.)
 
 
E9-10 Beka Company owns equipment that cost $50,000 when purchased on January 1, 2008.
 
It has been depreciated using the straight-line method based on estimated salvage value of $5,000 and an estimated useful life of 5 years.
 
Instructions
Prepare Beka Company’s journal entries to record the sale of the equipment in these four independent situations.
 
(a) Sold for $28,000 on January 1, 2011.
(b) Sold for $28,000 on May 1, 2011.
(c) Sold for $11,000 on January 1, 2011.
(d) Sold for $11,000 on October 1, 2011.
 
 
P9-5A At December 31, 2011, Jimenez Company reported the following as plant assets.
and so on ...
 
At December 31, 2011, Jimenez Company reported the following as plant assets.
 
 
Land                                                                                                                $ 4,000,000
Buildings                                                                     $28,500,000
Less: Accumulated depreciation—buildings                12,100,000                   16,400,000
Equipment                                                                   48,000,000
Less: Accumulated depreciation—equipment              5,000,000                      43,000,000
Total plant assets                                                                                             $63,400,000
 
During 2012, the following selected cash transactions occurred.
April 1 Purchased land for $2,130,000.
May 1 Sold equipment that cost $780,000 when purchased on January 1, 2008. The equipment was sold for $450,000.
June 1 Sold land purchased on June 1, 2002, for $1,500,000.The land cost $400,000.
July 1 Purchased equipment for $2,000,000.
Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 2002. No salvage value was received.
 
Instructions
(a) Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.
 
(b) Record adjusting entries for depreciation for 2012. (c) Prepare the plant assets section of Jimenez’s balance sheet at December 31, 2012.
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