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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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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