Purchase Solution

Transaction Analysis

Not what you're looking for?

Ask Custom Question

Prepare an answer sheet with the following coumn headings. For each of the following trasactions or adjustments you are to 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 indicating wheather it is an addition or subtraction. transaction A. has been done as an illustration (see attached Excel sheet). Net income is not affeted by every transaction. In some cases, only one column may be affected because all of the specific accoutns affected by the transaction are included in that category.

A. Recorded $200 of depreciation expense(already completed on excel sheet)

B. Sold land that had orginally cost $52,000 for $45,600 in cash.
C. Recorded a $272,000 payment for the cost of developing and registering a patent.
D. Recognized periodic amortization for the patent (in part c) using the maximum satutory useful life.
E. Capitalized $12,800 of cash expeditures made to extend the useful life of production equipment.
F. Expensed $7,200 of cash expenditures incurred for routine maintenance of production equipment.
G. Sold a used machine for $36,000 in cash. The machine originally cost $120,000 and had been depreciated for the first two years of its five-year useful life using the double declining balance method. (hint: you must compute the balance of the accumulated depreciation account before you can record the sale.)
H. Purchased a business for $1,280,000 in cash. The fair market values of the net assets acquired were as follows: land - $160,000. Buildings - $800,000. Equipment - $400,000 and long-term debt - $280,000.

Purchase this Solution

Solution Summary

Prepare an answer sheet with the following column headings. For each of the following transactions or adjustments you are to 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 indicating whether it is an addition or subtraction. Transaction A has been done as an illustration (see attached Excel sheet). Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category.

A. Recorded $200 of depreciation expense(already completed on excel sheet)

B. Sold land that had originally cost $52,000 for $45,600 in cash.
C. Recorded a $272,000 payment for the cost of developing and registering a patent.
D. Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life.
E. Capitalized $12,800 of cash expenditures made to extend the useful life of production equipment.
F. Expensed $7,200 of cash expenditures incurred for routine maintenance of production equipment.
G. Sold a used machine for $36,000 in cash. The machine originally cost $120,000 and had been depreciated for the first two years of its five-year useful life using the double declining balance method. (hint: you must compute the balance of the accumulated depreciation account before you can record the sale.)
H. Purchased a business for $1,280,000 in cash. The fair market values of the net assets acquired were as follows: land - $160,000. Buildings - $800,000. Equipment - $400,000 and long-term debt - $280,000.

Purchase this Solution


Free BrainMass Quizzes
Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Basics of corporate finance

These questions will test you on your knowledge of finance.

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.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.