FUNDAMENTAL ACCT PRIN CONNECT ACCESS
FUNDAMENTAL ACCT PRIN CONNECT ACCESS
24th Edition
ISBN: 9781266494604
Author: Wild
Publisher: MCG
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Chapter 10, Problem 3APSA
To determine

Concept Introduction:

Journal entry is recording of all accounting transaction in a chronological order.

Straight line depreciation is a method of depreciation in which asset is depreciated over its useful life constantly. In this method depreciated is calculated by dividing cost of asset less salvage value by useful life of an asset.

Double declining method of depreciation is a method of depreciation in which rate is doubled according to the useful life of an asset.

Requirement 1:

We have to determine the total of all asset mentioned.

Expert Solution
Check Mark

Answer to Problem 3APSA

    ParticularsLandBuilding 2Building 3Land improvements 1Land improvements 2
    Totals$2,115,800598,0002202,000390,000164,000

.

Explanation of Solution

    Allocation of purchase priceAppraised valuePercent of Total appraised valuexTotal cost of acquisition=Apportioned cost
    Land1,736,00062%2,600,0001612,000
    Building2644,00023%2,600,000598,000
    Land improvement 1420,00015%2,600,000390,000
    Total28,00,000100%$2,600,000
    ParticularsLandBuilding 2Building 3Land improvements 1Land improvements 2
    Purchase price1,612,000598,0000390,0000
    Demolition328,400
    Land grading175,400
    New building (construction)002202,00000
    New improvement cost164,000
    Totals$2,115,800598,0002202,000390,000164,000

In the above table, the appraised value of total assets is 2,800,000. We have calculated the percentage of total assets in proportion to appraised value. Thereafter, the value $2,600,000 has been apportioned in the ratio of appraised value of individual assets. After calculating individual value, the additional costs have been added to the apportioned acquisition value of respective individual asset and total value of asset has been derived.

To determine

Concept Introduction:

Journal entry is recording of all accounting transaction in a chronological order.

Straight line depreciation is a method of depreciation in which asset is depreciated over its useful life constantly. In this method depreciated is calculated by dividing cost of asset less salvage value by useful life of an asset.

Double declining method of depreciation is a method of depreciation in which rate is doubled according to the useful life of an asset.

Requirement 2:

We have to determine the journal entry for cash transaction.

Expert Solution
Check Mark

Answer to Problem 3APSA

    TransactionParticularsAmount ($)Amount($)
    1.Land2,115,000
    Building 2598,000
    Building 32,202,000
    Land improvements 1390,000
    Land improvements 2164,000
    Cash5469,800
    ( to record cash transaction)

.

Explanation of Solution

The above answer can be explained as all asset will be debited and cash account will be credited.

In this case land account, Building 2 &3 and Land improvements 1 & 2 will be debited with their respective amount and cash account will be credited with lumpsum amount.

To determine

Concept Introduction:

Journal entry is recording of all accounting transaction in a chronological order.

Straight line depreciation is a method of depreciation in which asset is depreciated over its useful life constantly. In this method depreciated is calculated by dividing cost of asset less salvage value by useful life of an asset.

Double declining method of depreciation is a method of depreciation in which rate is doubled according to the useful life of an asset.

Requirement 3:

We have to determine the journal entry for depreciation asset.

Expert Solution
Check Mark

Answer to Problem 3APSA

    TransactionParticularsAmount ($)Amount($)
    1.Depreciation expense- building 226,900
    Accumulated depreciation − building 226,900
    ( to record depreciation)
    Depreciation expense- building 372,400
    Accumulated depreciation − building 372,400
    ( to record depreciation)
    Depreciation expense- land improvement 132,500
    Accumulated depreciation − land improvement 132,500
    ( to record depreciation)
    Depreciation expense- land improvement 28200
    Accumulated depreciation − land improvement 28200
    ( to record depreciation)

Explanation of Solution

The above answer can be explained as depreciation will be calculated on asset and depreciation expense on asset will be debited and accumulated depreciation account will be credited.

Depreciation on assets can be calculated as −

Depreciation=costsalvagevalue/usefullifeofanasset

    ParticularsFormulaAmount
    Depreciation expense- building 2(598,000-60,000)/2026,900
    Depreciation expense- building 3(2,202,000-392000)/2572,400
    Depreciation expense- land improvement 1390,000/1232,500
    Depreciation expense- land improvement 2164,000/208,200

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Chapter 10 Solutions

FUNDAMENTAL ACCT PRIN CONNECT ACCESS

Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Cost of plant assets C1 Kegler Bowling installs...Ch. 10 - Assigning costs to plant assets C1 Q Listed below...Ch. 10 - Straight-line depreciation P1 On January 1= the...Ch. 10 - QS 10-' Units-of-production depreciation On...Ch. 10 - QS10-5 Double-declining-balance method P1 A...Ch. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Revenue and capital expenditures C3 1. Classify...Ch. 10 - Prob. 10QSCh. 10 - Natural resources and depletion P3 Perez Company...Ch. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Exercise 10-1 Cost of plant assets C1 Q Rizio Co....Ch. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Exercise 104 Straight-line depreciation P1 Ramirez...Ch. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6 Double-declining-balance...Ch. 10 - Exercise 10-7 Straight-line depreciation P1 New...Ch. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Exercise 10-9 Straight-line depreciation and...Ch. 10 - Exercise 10-10 Double-declining-balance...Ch. 10 - Exercise 10-11 Straight-line, partial-year...Ch. 10 - Exercise 10-12 Dauble-declining-balance....Ch. 10 - Exercise 10-13 Revising depreciation C2 Apex...Ch. 10 - Exercise 10-14 Ordinary repairs, extraordinary...Ch. 10 - Exercise 10.15 Extraordinary repairs; plant asset...Ch. 10 - Exercise 10-16 Disposal of assets P2 Diaz Company...Ch. 10 - Exercise 10-17 Partial-year depreciation: disposal...Ch. 10 - Exercise 10-18 Depletion of natural resources P3...Ch. 10 - Exercise 10-19 Amortization of intangible assets...Ch. 10 - Exercise 10-20 Goodwill P4 Robinson Company...Ch. 10 - Exercise 10-21 Preparing a balance sheet P1 P3...Ch. 10 - Exercise 10-22 Evaluating efficient use of assets...Ch. 10 - Exercise 10-23A Exchanging assets P5 Gilly...Ch. 10 - Prob. 24ECh. 10 - Problem 10-1A Plant asset costs; depreciation...Ch. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Problem 10-3A Asset cost allocation; straight-line...Ch. 10 - Problem 10-4A Computing and revising depreciation;...Ch. 10 - Problem 10-5A Computing and revising depreciation;...Ch. 10 - Problem 1O-6A Disposal of plant assets C1 P1...Ch. 10 - Problem 1O7A Natural resources P3 On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Problem 10-1B Plant asset costs; depreciation...Ch. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Problem 10-3B Asset cost allocation; straight-line...Ch. 10 - Prob. 4BPSBCh. 10 - Problem 10-5B Computing and revising...Ch. 10 - Problem 1O-6B Disposal of plant assets C1 P1 P2 On...Ch. 10 - Prob. 7BPSBCh. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY