3. Donated assets.Cheng Company has recently decided to accept a proposal from the City of Bel Aire that publicly owned propertywith a large warehouse located on it will be donated to Cheng if Cheng will build a branch plant in Bel Aire. Theappraised value of the property is $500,000 and of the warehouse is $1,000,000.InstructionsPrepare the entry by Cheng for the receipt of the properties.DebitCredit4. Capitalization of interest.During 2017, Barden Building Company constructed various assets at a total cost of $14,700,000. The weightedaverage accumulated expenditures on assets qualifying for capitalization of interest during 2017 were$9,800,000. The company had the following debt outstanding at December 31, 2017:1. 10%, 5-year note to finance construction of various assets,dated January 1, 2017, with interest payable annually on January 1$6,300,0002. 12%, ten-year bonds issued at par on December 31, 2011, with interestpayable annually on December 317,000,0003. 9%, 3-year note payable, dated January 1, 2016, with interest payableannually on January 13,500,000InstructionsCompute the amounts of each of the following (show computations).1. Avoidable interest.2. Total interest to be capitalized during 2017. 1. Acquisition of equipment (truck)$ 16,000that the company carries ininventory. The computer system costs$ 15,200Truck# 3 has a list price of2$and is acquired in exchange for a computer system$ 12,000 andis normallysold by the company forThe company uses a perpetual inventory system.Acquisition costs of trucksDebitCreditCompany operates a retail computer store. Toimprove de livery services to customers, the companypurchases four new trucks onApril 12020The terms of eachof the four trucks are described as follows:# 4 has a list price ofstock of the company. The stock has a par value per share of $10 and a market price of $ 13 per shareTruck$ 14,000and is acquired in exchange for a1,000 shares of commonTruck# 1 has a list price of$ 15,000and is acquired with a cash payment of$13,900DebitCreditDebitCreditTruck# 2 has a list price of$ 16,000and is acquired for a down payme nt of$2,0002. Nonmonetary exchange.A machine cost $300,000, has annual depreciation expense of $60,000, and has accumulated depreciation of$150,000 on December 31, 2017. On April 1, 2018, when the machine has a fair value of $120,000, it isexchanged for a similar machine with a fair value of $360,000 and the proper amount of cash is paid. Theexchange lacked commercial substance.and a zero-intere st-bearing note with a face amount of14,000The note is dueApril2021The company normally has to pay an interest rate ofand the de alership has an incremental borrowing rate ofInstructionsPrepare all entries that are necessary at April 1, 2018.10%for such a borrowing,8%DebitCreditDebitCredit

Journal entry:The monetary transaction of the business is recorded in the books of accounts called…

3. Donated assets. Cheng Company has recently decided to accept a proposal from the City of Bel Aire that publicly owned property with a large warehouse located on it will be donated to Cheng if Cheng will build a branch plant in Bel Aire. The appraised value of the property is $500,000 and of the warehouse is $1,000,000. Instructions Prepare the entry by Cheng for the receipt of the properties. Debit Credit

3. Donated assets. Cheng Company has recently decided to accept a proposal from the City of Bel Aire that publicly owned property with a large warehouse located on it will be donated to Cheng if Cheng will build a branch plant in Bel Aire. The appraised value of the property is $500,000 and of the warehouse is $1,000,000. Instructions Prepare the entry by Cheng for the receipt of the properties. Debit Credit

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter2: Asset And Liability Valuation And Income Recognition

Section: Chapter Questions

Problem 5QE

See similar textbooks

Similar questions

Williams Corporation had the following purchases for May: May 3Bought ten lawn rakes from Owens Company, invoice no. J34Y9, 250.25; terms net 15 days; dated May 1; FOB shipping point, freight prepaid and added to the invoice, 15 (total 265.25). 11Bought one weed trimmer from Lionels Lawn Landscaping, invoice no. R7740, 219.72; terms 2/10, n/30; dated May 9; FOB shipping point, freight prepaid and added to the invoice, 35 (total 254.72). 15Bought five bags of fertilizer from Wrights Farm Supplies, invoice no. 478, 210.97; terms net 30 days; dated May 13; FOB destination. 25Bought one lawn mower from Gutierrez Corporation, invoice no. 2458, 425.39; terms net 30 days; dated May 22; FOB destination. Assume that Williams Corporation had beginning balances on May 1 of 3,492.29 (Accounts Payable 212), 4,239.49 (Purchases 511), and 234.89 (Freight In 514). Record the purchases of merchandise on account in the purchases journal (page 13) and then post to the general ledger.
Equipment with an estimated market value of $27,113 is offered for sale at $45,619. The equipment is acquired for $15,304 in cash and a note payable of $20,994 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is a.$42,417 b.$15,304 c.$36,298 d.$27,113
Equipment with an estimated market value of $29,149 is offered for sale at $45,171. The equipment is acquired for $16,004 in cash and a note payable of $21,540 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is Oa. $29,149 Ob. $37,544 Oc. $45,153 Od. $16,004
XYZ Company's policy for the purchases of any asset over the value of $3,000 requires the purchasing clerk and purchasing manager to sign off is an example of а. general authorization. b. special authorization. С. specific authorization. d. generic authorization.
Answer the following questions. Show your solutions in good form. 1. Fenn Company provided the following information for the current year. Merchandise purchased for resale Freight in Freight out Purchase returns Interest on inventory loan 4,000,000 100,000 50,000 20,000 200,000 What is the inventoriable cost of the purchase? a. 4,280,000 b. 4,030,000 C. 4,080,000 d. 4,130,000
The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price Applicable sales tax Cash discount taken for prompt payment Freight paid Cost of insurance coverage on machine while in transit Installation costs Testing and adjusting costs Repair of damages to machine caused by the firm's employees750 Prepaid maintenance contract for first year of machine's use $30,000 2,000 400 260 125 3,000 475 300 Determine the acquisition cost of the machine.
Colleges Software Guides Search Contact A sale of OMR 39 to S. Yusof was entered in the books as OMR 29, correction will be: O a. Debit Cash 10 and Credit Sales 10 O b. Debit Sales 10 and Credit S. Yusof 10 O c. Debit S. Yusof 10 and Credit Sales 10 O d. Debit S. Yusof 10 and Credit Bank 10 is that part of the original cost of a fixed asset that is consumed during its period of a. Debtors
1. Resto supplies incorporated takes 32,000 loss on a number of older ovens in its inventory; it paid the manufacturer 170,000 for them but can sell them for only 75,000. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answers 2. A hotel corporation is preparing its end of year financial statements. Management has informed the accountant that in six weeks it will begin to close 12 of its properties. The accountant will provide information related to these future actions on the current end of year financial statements because of the _______ principle. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption…
The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price Applicable sales tax Cash discount taken for prompt payment Freight paid Cost of insurance coverage on machine while in transit Installation costs Testing and adjusting costs Repair of damages to machine caused by the firm's employees Prepaid maintenance contract for first year of machine's use $30,00o 2,000 400 260 125 3,000 475 750 300 Determine the acquisition cost of the machine. 个 Acquisition Cost-
Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquires these assets from Digital Sea Company (in millions): Fair Value $4 Cash Trading debt investments Equipment in process R&D 6 240 60 The in-process R&D has no alternative future use. Webflow pays $335 million in cash for the acquired assets, and also pays $5 million in cash for legal and advisory costs Note: Provide all answers in millions and round answers to the nearest whole number. For example. 16.355.000 would be 16. a Prepare the journal entry to record the acquisition if it qualifies as a business combination. Debit Credit Cash to record the business combination 0 0 0 0 0 D O 0 10 0 0 0 340 it is an ecat acnuutine Ama the cash and die thindacate
Question: 3On March 31, 2020, Sole way, Inc. sold 800 computers to Xavier Company. Prior to this sale the Sole way records for these units included the following cost layers: Purchase Date Quantity Unit Cost Total CostMar. 11, 2019500 20 10,000Mar. 19, 2019 1200 23 27,600Total on hand 1700 37,600 Required:⦁ Complete a subsidiary ledger record for the computer using each of the three inventory valuation methods listed below⦁ Average cost.⦁ FIFO. ⦁ LIFO. Your inventory records should show both purchases of this product, the sale on Mar 31, and the balance on hand on Mar 31, 2020.⦁ Which of the three cost flow assumptions will result in reporting the lowest net income for the current year? Explain
Merchandise purchased for resale.. • Freight In.. • Freight Out. • Purchased returns. Interest on inventory loan. What is the inventoriable cost of the purchase? Gamma Company provided the following information for the current year: .P 4,000,000 100,000 50,000 20,000 200,000 A. P4,280,000 В. Р4,030,000 С. Р4,080,000 D. P4,130,000