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Accounting questions

Intermediate Accounting-12th ED (KIESO, WEYGANDT, and WARFIELD)

1. Chapter 10 #4 Indicate where the following items would be shown on
a balance sheet.
(a) A lien that was attached to the land when purchased.
(b) Landscaping costs.
(c) Attorney's fees and recording fees related to purchasing
land.
(d) Variable overhead related to construction of machinery.
(e) A parking lot servicing employees in the building.
(f) Cost of temporary building for workers during construction
of building.
(g) Interest expense on bonds payable incurred during
construction of a building.
(h) Assessments for sidewalks that are maintained by the
city.
(i) The cost of demolishing an old building that was on
the land when purchased.

2. BE11-2 Cheetah Company purchased machinery on January 1, 2007, for $60,000. The machinery is estimated
to have a salvage value of $6,000 after a useful life of 8 years. (a) Compute 2007 depreciation expense
using the straight-line method. (b) Compute 2007 depreciation expense using the straight-line
method assuming the machinery was purchased on September 1, 2007.

3. BE7-4 Battle Tank, Inc. had net sales in 2007 of $1,200,000. At December 31, 2007, before adjusting entries,
the balances in selected accounts were: Accounts Receivable $250,000 debit, and Allowance for Doubtful
Accounts $2,100 credit. If Battle Tank estimates that 2% of its net sales will prove to be uncollectible,
prepare the December 31, 2007, journal entry to record bad debt expense.

4. BE21-3 Rick Kleckner Corporation recorded a capital lease at $200,000 on January 1, 2008. The interest
rate is 12%. Kleckner Corporation made the first lease payment of $35,947 on January 1, 2008. The lease
requires eight annual payments. The equipment has a useful life of 8 years with no salvage value. Prepare
Kleckner Corporation's December 31, 2008, adjusting entries.

5. BE8-2 Alanis Morrissette Company uses a perpetual inventory system. Its beginning inventory consists
of 50 units that cost $30 each. During June, the company purchased 150 units at $30 each, returned 6 units
for credit, and sold 125 units at $50 each. Journalize the June transactions.

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