Exercise 11-6
Muggsy Bogues Company purchased equipment for $212,000 on October 1, 2014. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $12,000. Estimated production is 40,000 units and estimated working hours are 20,000. During 2014, Bogues uses the equipment for 525 hours and the equipment produces 1,000 units.
Compute depreciation expense under each of the following methods. Bogues is on a calendar-year basis ending December 31.
Exercise 11-9
Presented below is information related to LeBron James Manufacturing Corporation.
|
Asset
|
Cost
|
Estimated Salvage
|
Estimated Life (in years)
|
|
A
|
$ 40,500
|
$ 5,500
|
10
|
|
B
|
33,600
|
4,800
|
9
|
|
C
|
36,000
|
3,600
|
9
|
|
D
|
19,000
|
1,500
|
7
|
|
E
|
23,500
|
2,500
|
6
|
Compute the rate of depreciation per year to be applied to the plant assets under the composite method.
Compute the rate of depreciation per year to be applied to the plant assets under the composite method.
Prepare the entry to record the sale of asset D for cash of $4,800. It was used for 6 years, and depreciation was entered under the composite method.
Exercise 11-21
Forda Lumber Company owns a 7,000-acre tract of timber purchased in 2007 at a cost of $1,300 per acre. At the time of purchase, the land was estimated to have a value of $300 per acre without the timber. Forda Lumber Company has not logged this tract since it was purchased. In 2014, Forda had the timber cruised. The cruise (appraiser) estimated that each acre contained 8,000 board feet of timber. In 2014, Forda built 10 miles of roads at a cost of $7,840 per mile. After the roads were completed, Forda logged and sold 3,500 trees containing 850,000 board feet.
Determine the cost of timber sold related to depletion for 2014.
If Forda depreciates the logging roads on the basis of timber cut, determine the depreciation expense for 2014.
If Forda plants five seedlings at a cost of $4 per seedling for each tree cut, how should Forda treat the reforestation?
Exercise 12-1
Presented below is a list of items that could be included in the intangible assets section of the balance sheet.
Indicate which items on the list below would generally be reported as intangible assets in the balance sheet.
Exercise 12-6
Rolanda Marshall Company, organized in 2013, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2014.
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles
Make the entries as of December 31, 2014, recording any necessary amortization.
Reflect all balances accurately as of December 31, 2014. (Use straight-line amortization.)
Exercise 12-8
Horace Greeley Corporation was organized in 2013 and began operations at the beginning of 2014. The company is involved in interior design consulting services. The following costs were incurred prior to the start of operations.
Compute the total amount of organization costs incurred by Greeley.
Prepare the journal entry to record organization costs for 2014.
Attachment:- Exercises.rar