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MGAB02H3 Lecture 9: Ch9 - Additional Capital Assets QA

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peachturtle345
6 Jan 2016
School
UTSC
Department
Financial Accounting
Course
MGAB02H3
Professor
George Quan Fun

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Document Summary

Mgab02h3 financial accounting i 2014 winter session. Tomlin contractors completed these transactions involving the purchase and operation of heavy equipment: Paid ,440 cash for a new front-end loader, plus ,200 in provincial sales tax and ,500 for transportation charges. The loader was estimated to have a four-year life and a ,740 salvage value. Paid ,660 to enclose the cab and install air conditioning in the loader. This increased the estimated salvage value of the loader by ,110. Paid to repair the loader after the operator backed it into a tree. As a result, the estimated useful life of the loader was increased by two years. Recorded straight-line amortization on the loader (to nearest whole month). Salvage (34,740 + 1,110) =37,068 6/12 = 18,534: 255,440 + 15,200 + 2,500 = 273,140, amortization from july 1/2005 to oct. 2/2005: = 60,280 3/12: amortization from jan. 1/2014 to june 30/2014:

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Related Questions

Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $326,000 cash plus $13,040 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $32,600 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $4,000 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,200. Dec. 31 Recorded annual straight-line depreciation on the loader. 2017 Jan. 1 Paid $4,300 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years. Feb. 17 Paid $1,075 to repair the loader after the operator backed it into a tree. Dec. 31 Recorded annual straight-line depreciation on the loader.
Required: Prepare journal entries to record these transactions and events.

Champion Contractors completed the following transactions andevents involving the purchase and operation of equipment in itsbusiness.


2016

Jan. 1 Paid $306,000 cash plus $12,240 insales tax and $1,900 in transportation (FOB shipping point) for anew loader. The loader is estimated to have a four-year life and a$30,600 salvage value. Loader costs are recorded in the Equipmentaccount.
Jan. 3 Paid $7,000 to enclose the cab andinstall air conditioning in the loader to enable operations underharsher conditions. This increased the estimated salvage value ofthe loader by another $2,100.
Dec. 31 Recorded annual straight-linedepreciation on the loader.


2017

Jan. 1 Paid $4,300 to overhaul theloader’s engine, which increased the loader’s estimated useful lifeby two years.
Feb. 17 Paid $1,075 to repair the loaderafter the operator backed it into a tree.
Dec. 31 Recorded annual straight-linedepreciation on the loader.


Required:

Prepare journal entries to record these transactions andevents.

Problem 10-4A Computing and revising depreciation; revenue and capital expenditures LO C1, C2, C3

Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.


2016

Jan. 1 Paid $298,000 cash plus $11,920 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,800 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $5,000 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,500.
Dec. 31 Recorded annual straight-line depreciation on the loader.


2017

Jan. 1 Paid $4,300 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
Feb. 17 Paid $1,075 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.


Required:

Prepare journal entries to record these transactions and events.

*These are the options for the general journal

Accumulated amortization

Accumulated depletion

Accumulated depreciation—Equipment

Amortization expense

Building

Cash

Depletion expense

Depreciation expense—Equipment

Equipment

Gain on sale of equipment

Goodwill

Impairment loss

Land

Land improvements

Leasehold improvements

Loss from fire

Loss on disposal of equipment

Loss on exchange of assets

Loss on sale of equipment

Mineral deposit

Ore mine

Prepaid rent

Rent expense

Repairs expense—Equipment