! Required information [The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $48,000 cash (estimated useful life, ten years). b. On January 1, purchased another business for $176,000 cash, including $12,000 for goodwill. The assets included accounts receivable with a fair value of $15,000 and property and equipment with a fair value of $149,000 (with a residual value of $15,645 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 $21,600. The company uses straight-line depreciation. The lease will expire in six years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $4,900 during the current year. e. On December 31 of the current year, sold Machine A for $7,000 cash. Original cost was $19,000; accumulated depreciation to December 31 of the prior year was $11,920 (on a straight-line basis with a $4,100 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 $5,500 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $74,700; accumulated depreciation to December 31 of the prior year was $3,300 (on a straight-line basis with a $8,700 residual value and 20-year useful life). 2. For each of these the assets involved in transactions (a) through (f), record the adjusting entry for depreciation or amortization expense at the end of the current year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
! Required information [The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $48,000 cash (estimated useful life, ten years). b. On January 1, purchased another business for $176,000 cash, including $12,000 for goodwill. The assets included accounts receivable with a fair value of $15,000 and property and equipment with a fair value of $149,000 (with a residual value of $15,645 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 $21,600. The company uses straight-line depreciation. The lease will expire in six years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $4,900 during the current year. e. On December 31 of the current year, sold Machine A for $7,000 cash. Original cost was $19,000; accumulated depreciation to December 31 of the prior year was $11,920 (on a straight-line basis with a $4,100 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 $5,500 for a complete reconditioning of Machine B acquired on January 1 of the prior year. Original cost, $74,700; accumulated depreciation to December 31 of the prior year was $3,300 (on a straight-line basis with a $8,700 residual value and 20-year useful life). 2. For each of these the assets involved in transactions (a) through (f), record the adjusting entry for depreciation or amortization expense at the end of the current year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
[The following information applies to the questions displayed below.]
During the current year ending on December 31, BSP Company completed the following transactions:
a. On January 1, purchased a patent for $48,000 cash (estimated useful life, ten years).
b. On January 1, purchased another business for $176,000 cash, including $12,000 for goodwill. The assets included
accounts receivable with a fair value of $15,000 and property and equipment with a fair value of $149,000 (with a
residual value of $15,645 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 $21,600. The
company uses straight-line depreciation. The lease will expire in six years. (Amounts spent to enhance leased property
are capitalized as intangible assets called Leasehold Improvements.)
d. Total expenditures for ordinary repairs were $4,900 during the current year.
e. On December 31 of the current year, sold Machine A for $7,000 cash. Original cost was $19,000; accumulated
depreciation to December 31 of the prior year was $11,920 (on a straight-line basis with a $4,100 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 $5,500 for a complete reconditioning of Machine B acquired on January 1 of
the prior year. Original cost, $74,700; accumulated depreciation to December 31 of the prior year was $3,300 (on a
straight-line basis with a $8,700 residual value and 20-year useful life).
2. For each of these the assets involved in transactions (a) through (f), record the adjusting entry for depreciation or amortization
expense at the end of the current year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9bd80995-77f1-443e-802d-f1896d0250ed%2F60a382b5-96a9-4db4-8274-04e237230afd%2Ft6pjlwe_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
During the current year ending on December 31, BSP Company completed the following transactions:
a. On January 1, purchased a patent for $48,000 cash (estimated useful life, ten years).
b. On January 1, purchased another business for $176,000 cash, including $12,000 for goodwill. The assets included
accounts receivable with a fair value of $15,000 and property and equipment with a fair value of $149,000 (with a
residual value of $15,645 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 $21,600. The
company uses straight-line depreciation. The lease will expire in six years. (Amounts spent to enhance leased property
are capitalized as intangible assets called Leasehold Improvements.)
d. Total expenditures for ordinary repairs were $4,900 during the current year.
e. On December 31 of the current year, sold Machine A for $7,000 cash. Original cost was $19,000; accumulated
depreciation to December 31 of the prior year was $11,920 (on a straight-line basis with a $4,100 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 $5,500 for a complete reconditioning of Machine B acquired on January 1 of
the prior year. Original cost, $74,700; accumulated depreciation to December 31 of the prior year was $3,300 (on a
straight-line basis with a $8,700 residual value and 20-year useful life).
2. For each of these the assets involved in transactions (a) through (f), record the adjusting entry for depreciation or amortization
expense at the end of the current year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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