Indicate effect of transactions on assets, liabilities, and net income
Not what you're looking for?
Prepare one sheet with the column headings as below. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount, and indicating whether it is an addition, (+) or a subtraction (-).
A.
Assets Liabilities Net Income
Recorded $200 Accumulated Depreciation
of depreciation Depreciation Expense
expense -200 -200
B. Sold land that had originally cost $13,000 for $11,400 in cash.
C. Recorded a $68,000 payment for the cost of developing and registering a patent.
D. Recognized periodic amortization for the patent (in c above) using the maximum statutory useful life.
E. Capitalized $3,200 of cash expenditures made to extend the useful life of production equipment.
F. Expensed $1,800 of cash expenditures incurred for routine maintenance of production equipment.
G. Sold a used machine for $9,000 in cash. The machine originally cost $30,000 and had been depreciated for the first two years of its five-year useful life using the double-declining-balance method. Compute the balance of the accumulated depreciation account before you can record the sale.
H. Purchased a business for $320,000 in cash. The fair market values of the net assets acquired were as follows: Land, $40,000; Buildings, $200,000; Equipment, $100,000; and Long-Term Debt, $70,000.
I. Recognized periodic amortization of goodwill from the purchase transaction (in h above) using a 40-year useful life.
Purchase this Solution
Solution Summary
The solution presents an Excel table for the entries plus detailed explanations for part G and H.
Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations