Recently the Ace Manufacturing Company purchased an office building and system. Below is the information about these two new items of Property, Plant, & Equipment. The following are the facts for the office building: Date on which the building was purchased Purchase price Method of payment April 1, 2021 $1,800,000 paid $300,000 cash - signed a note for the remainder of the purchase price 50 years $0 Straight-Line Estimated life Estimated value at the end of 50 years Depreciation method The following are the facts for the computer system: Date on which computer was purchased Purchase price Method of payment Estimated life Estimated value at the end of 7 years May 1, 2021 $58,800 Cash 7 years $0 Depreciation method Straight-Line The following is a partial list of the accounts in Ace's General Ledger. These are the only accounts you need for this problem. D Cash D Building (asset account) D Accumulated Depreciation-Building D Computer (asset account) D Accumulated Depreciation-Computer D Note Payable D Depreciation Expense ose the forms Prepare the General Journal entry to record the purchase of the new building on April 1. Calculate the amount of monthly depreciation for the new building. Requirement 3 Prepare the April 30 General Journal adjusting entry to record depreciation of the office building for the month of April. Requirement 4 Prepare the General Journal entry to record the purchase of the new computer system on May 1. Requirement 5 Calculate the amount of monthly depreciation for the new computer system. Requirement 6
Recently the Ace Manufacturing Company purchased an office building and system. Below is the information about these two new items of Property, Plant, & Equipment. The following are the facts for the office building: Date on which the building was purchased Purchase price Method of payment April 1, 2021 $1,800,000 paid $300,000 cash - signed a note for the remainder of the purchase price 50 years $0 Straight-Line Estimated life Estimated value at the end of 50 years Depreciation method The following are the facts for the computer system: Date on which computer was purchased Purchase price Method of payment Estimated life Estimated value at the end of 7 years May 1, 2021 $58,800 Cash 7 years $0 Depreciation method Straight-Line The following is a partial list of the accounts in Ace's General Ledger. These are the only accounts you need for this problem. D Cash D Building (asset account) D Accumulated Depreciation-Building D Computer (asset account) D Accumulated Depreciation-Computer D Note Payable D Depreciation Expense ose the forms Prepare the General Journal entry to record the purchase of the new building on April 1. Calculate the amount of monthly depreciation for the new building. Requirement 3 Prepare the April 30 General Journal adjusting entry to record depreciation of the office building for the month of April. Requirement 4 Prepare the General Journal entry to record the purchase of the new computer system on May 1. Requirement 5 Calculate the amount of monthly depreciation for the new computer system. Requirement 6
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing
Section: Chapter Questions
Problem 7Q
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Transcribed Image Text:Recently the Ace Manufacturing Company purchased an office building and a new computer
system. Below is the information about these two new items of Property, Plant, & Equipment.
The following are the facts for the office building:
Date on which the building was purchased ... April 1, 2021
Purchase price
Method of payment
$1,800,000
paid $300,000 cash – signed a note for
the remainder of the purchase price
50 years
Estimated life
Estimated value at the end of 50 years
$0
Depreciation method
Straight-Line
The following are the facts for the computer system:
Date on which computer was purchased
Purchase price
Method of payment
May 1, 2021
$58,800
Cash
Estimated life
7 years
Estimated value at the end of 7 years
$0
Depreciation method
Straight-Line
The following is a partial list of the accounts in Ace's General Ledger. These are the only accounts
you need for this problem.
> Cash
D Building (asset account)
D Accumulated Depreciation-Building
D Computer (asset account)
D Accumulated Depreciation-Computer
D Note Payable
D Depreciation Expense
Ose the forms on
Prepare the General Journal entry to record the purchase of the new building on April 1.
Calculate the amount of monthly depreciation for the new building.
Requirement 3
Prepare the April 30 General Journal adjusting entry to record depreciation of the office building
for the month of April.
Requirement 4
Prepare the General Journal entry to record the purchase of the new computer system on
May 1.
Requirement 5
Calculate the amount of monthly depreciation for the new computer system.
Requirement 6
Prennre ti
Transcribed Image Text:-- April 1 office building purchase
Debit
Credit
Date
Account Name
Monthly depreciation for the office building
--April 30 depreciation adjusting entry for the office building
Date
Account Name
Debit
Credit
May 1 computer system purchase
Date
Account Name
Debit
Credit
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