Explore BrainMass

Explore BrainMass

    Accounting questions

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    21.The following information is available from the financial statements of Bluebird Enterprises for the years ended on December 31, 2004 and 2005:
    2005 2004
    Buildings $1,500,000 $2,250,000
    Accumulated depreciation 550,000 660,000

    Loss on sale of building in 2005 was $10,000.
    The book value of the building sold was $600,000. There were no buildings purchased in 2005.

    a. Record the journal entries required to record the sale of the building by Bluebird.

    22.Acme Sales Corporation sold a delivery truck on December 30, 2005, for $15,000.
    The truck was purchased for $65,000 on January 1, 2003. At the time Acme
    estimated its useful life at five years and its residual value at $5,000. Depreciation is recorded annually on December 31.
    a. Prepare the necessary journal entries to record the sale assuming Acme uses the straight-line depreciation method.
    b. Prepare the necessary journal entries to record the sale assuming Acme uses the double-declining balance method of depreciation.

    23. - Depreciation Methods.
    A high-speed multiple-bit drill press costing $240,000 has an estimated salvage value of $20,000 and a life of ten years. What is the annual depreciation for each of the first two full years under the following depreciation methods?

    1. Double-declining-balance method:

    a. Year one:

    b. Year two:

    2. Units of production (activity) method (lifetime output is estimated at 110,000 units; the press produced 12,000 units in year one and 18,000 in year two):

    a. Year one:

    b. Year two:

    3. Sum-of-the-years'-digits method:

    a. Year one:

    b. Year two:

    4. Straight-line depreciation method:

    a. Year one:

    b. Year two:

    24.- Lower of Cost or Market
    Presented below is data relative to the 12/31/08 inventory of Kidd Company:
    Number Units Original Cost Total Current
    Item In Inventory Per Unit Original Cost Replacement Cost
    A 3,000 $1.09 $3,270 $1.08
    B 3,000 1.30 3,900 1.15
    C 3,000 1.50 4,500 1.05
    D 3,000 1.60 4,800 1.65
    E 3,000 1.80 5,400 1.70
    Total 15,000 $21,870

    Upper Lower Inventory
    Limit Limit Designated Valuation
    Item ("Ceiling") ("Floor") Market (Totals)

    Additional Data:
    Selling price is $2.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 35% of selling price.

    Complete the four columns above for each item.

    © BrainMass Inc. brainmass.com October 10, 2019, 2:08 am ad1c9bdddf


    Solution Summary

    The solution explains some accounting questions relating to Lifo, Fifo, Lower cost or market, and depreciation.