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During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1. purchased a patent for $26,000 cash (estimated useful life, five years). b. On January 1, purchased another business for $160,000 cash, including $12,000 for goodwill. The assets included accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $136,000 (with a residual value of $14,280 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $17,600. The company uses straight-line depreciation. The lease will expire in five years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $4,800 during the current year. e. On December 31 of the current year, sold Machine A for $7,200 cash. Original cost was $18,000; accumulated depreciation to December 31 of the prior year was $10,800 (on a straight-line basis with a $4,500 residual value and five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2). f. On December 31 of the current year, paid $6,600 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $49,000; accumulated depreciation to December 31 of the prior year was $2,500 (on a straight-line basis with a $9,000 residual value and 16-year useful life). P8-6 Part 1 Required: 1. Record journal entries for transactions (a) through (f). Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 Record the $26,000 purchase of patent for cash on January 1. Note: Enter debits before credits. Transaction General Journal Debit Credit

During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1. purchased a patent for $26,000 cash (estimated useful life, five years). b. On January 1, purchased another business for $160,000 cash, including $12,000 for goodwill. The assets included accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $136,000 (with a residual value of $14,280 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $17,600. The company uses straight-line depreciation. The lease will expire in five years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $4,800 during the current year. e. On December 31 of the current year, sold Machine A for $7,200 cash. Original cost was $18,000; accumulated depreciation to December 31 of the prior year was $10,800 (on a straight-line basis with a $4,500 residual value and five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2). f. On December 31 of the current year, paid $6,600 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $49,000; accumulated depreciation to December 31 of the prior year was $2,500 (on a straight-line basis with a $9,000 residual value and 16-year useful life). P8-6 Part 1 Required: 1. Record journal entries for transactions (a) through (f). Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 Record the $26,000 purchase of patent for cash on January 1. Note: Enter debits before credits. Transaction General Journal Debit Credit

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity
Section: Chapter Questions
Problem 6RE: Oz Corporation has the following assets at year-end: Patents (net), 26,000; Land, 50,000; Buildings,...
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During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $26,000 cash (estimated useful life, five years). b. On January 1, purchased another business for $160,000 cash, including $12,000 for goodwill. The assets included accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $136,000 (with a residual value of $14,280 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $17,600. The company uses straight-line depreciation. The lease will expire in five years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $4,800 during the current year. e. On December 31 of the current year, sold Machine A for $7,200 cash. Original cost was $18,000; accumulated depreciation to December 31 of the prior year was $10,800 (on a straight-line basis with a $4,500 residual value and five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2). f. On December 31 of the current year, paid $6,600 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $49,000; accumulated depreciation to December 31 of the prior year was $2,500 (on a straight-line basis with a $9,000 residual value and 16-year useful life). P8-6 Part 1 Required: 1. Record journal entries for transactions (a) through (f). Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field. View transaction list Journal entry worksheet < 1 234567 Record the $26,000 purchase of patent for cash on January 1. Note: Enter debits before credits. Transaction General Journal Debit Credit
Transcribed Image Text:During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $26,000 cash (estimated useful life, five years). b. On January 1, purchased another business for $160,000 cash, including $12,000 for goodwill. The assets included accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $136,000 (with a residual value of $14,280 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $17,600. The company uses straight-line depreciation. The lease will expire in five years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $4,800 during the current year. e. On December 31 of the current year, sold Machine A for $7,200 cash. Original cost was $18,000; accumulated depreciation to December 31 of the prior year was $10,800 (on a straight-line basis with a $4,500 residual value and five-year useful life). Record the depreciation expense in transaction e(1) and the sale in transaction e(2). f. On December 31 of the current year, paid $6,600 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $49,000; accumulated depreciation to December 31 of the prior year was $2,500 (on a straight-line basis with a $9,000 residual value and 16-year useful life). P8-6 Part 1 Required: 1. Record journal entries for transactions (a) through (f). Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field. View transaction list Journal entry worksheet < 1 234567 Record the $26,000 purchase of patent for cash on January 1. Note: Enter debits before credits. Transaction General Journal Debit Credit
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