![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Hardev
![!
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.](https://content.bartleby.com/qna-images/question/9bd80995-77f1-443e-802d-f1896d0250ed/60a382b5-96a9-4db4-8274-04e237230afd/t6pjlwe_thumbnail.jpeg)
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.
SAVE
AI-Generated Solution
info
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
to generate a solution
Click the button to generate
a solution
a solution
Knowledge Booster
Similar questions
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
![Text book image](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education