Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 13, Problem 38P
Chem-Lite, Inc., maintains its accounts on the basis of a fiscal year ending March 31. At March 31, 20X1, the Equipment account in the general ledger appeared as shown below. The company uses straight-line
Upon further investigation, you find the following contract dated December 1, 20X0, covering the acquisition of equipment:
Required:
Prepare in good form, including full explanations, the
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Chem-Lite, Inc., maintains its accounts on the basis of a fiscal year ending March 31. At March 31, 20X1, the Equipment account in the general ledger appeared as shown below. The company uses straight-line depreciation, a 10-year life, and 10 percent salvage value for all its equipment. It is the company’s policy to take a full year’s depreciation on all additions to equipment occurring during the fiscal year, and you may treat this policy as a satisfactory one for the purpose of this problem. The company has recorded depreciation for the fiscal year ended March 31, 20X1. Equipment 4/1/X0 Bal. forward 170,000 12/1/X0 11,200 1/2/X1 1,074 2/1/X1 1,074 3/1/X1 1,074 Upon further investigation, you find the following contract dated December 1, 20X0, covering the acquisition of equipment: List price $ 44,000 5% sales tax 2,200 Total $ 46,200 Down payment 11,200 Balance 35,000 9% interest, 24 months 6,300 Contract amount $ 41,300
Required:
Prepare the adjusting entries you would propose as…
Milestone company maintains its non-current assets at cost. A provision for depreciation account is used for each type of asset. The company depreciates machinery at the rate of 15% per year while fixtures are depreciated at a rate of 10% using the reducing balance method. Depreciation is to be calculated on assets in existence at the end of each year, giving a full year’s depreciation even if the asset was bought in the course of the year. The following transactions in assets have taken place:
2018 January 1: Bought machinery €3,000, fixtures €500
2018 July 1: Bought fixtures €440
2019 October 1: Bought machinery €4,000
2019 December 1: Bought fixtures €280
The financial year end of the company is 31st December.
You are Required to show:
(a) Machinery account
(b) The fixtures account
(c) The two-separate provision for depreciation accounts
Milestone company maintains its non-current assets at cost. A provision for depreciation account is used for each type of asset. The company depreciates machinery at the rate of 15% per year while fixtures are depreciated at a rate of 10% using the reducing balance method. Depreciation is to be calculated on assets in existence at the end of each year, giving a full year’s depreciation even if the asset was bought in the course of the year. The following transactions in assets have taken place:
2018 January 1: Bought machinery €3,000, fixtures €500 2018 July 1: Bought fixtures €440
2019 October 1: Bought machinery €4,000
2019 December 1: Bought fixtures €280
The financial year end of the company is 31st December.
You are Required to show:
(a) Machinery account
(b) The fixtures account
(c) The two-separate provision for depreciation accounts
(d) What are the two most important reasons why non-currents assets are depreciated?
(e) Assuming this question required you to calculate…
Chapter 13 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 13 - Prob. 1RQCh. 13 - K-J Corporation has current assets of 5 million...Ch. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Explain the use of a system of authorizations for...Ch. 13 - Moultrie Company discovered recently that a number...Ch. 13 - Does a failure to record the retirement of...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - Prob. 10RQ
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Gibson Manufacturing Company acquired new factory...Ch. 13 - Prob. 17RQCh. 13 - Do the auditors question the service lives adopted...Ch. 13 - Prob. 19RQCh. 13 - Explain how the existence of lease agreements may...Ch. 13 - Prob. 21RQCh. 13 - Prob. 22QRACh. 13 - Prob. 23QRACh. 13 - Gruen Corporation is a large diversified company...Ch. 13 - Prob. 25QRACh. 13 - Prob. 26QRACh. 13 - Prob. 27QRACh. 13 - Prob. 28QRACh. 13 - Prob. 29QRACh. 13 - Prob. 30QRACh. 13 - Prob. 31QRACh. 13 - To assure accountability for fixed-asset...Ch. 13 - Prob. 32BOQCh. 13 - Which of the following is an internal control...Ch. 13 - Which of the following accounts should be reviewed...Ch. 13 - Prob. 32EOQCh. 13 - Prob. 32FOQCh. 13 - Which of the following statements is not typical...Ch. 13 - Prob. 32HOQCh. 13 - Prob. 32IOQCh. 13 - An effective procedure for identifying unrecorded...Ch. 13 - Which of the following is not an overall test of...Ch. 13 - Prob. 32LOQCh. 13 - Prob. 33OQCh. 13 - Analysis of which account is least likely to...Ch. 13 - Prob. 34BOQCh. 13 - Prob. 34COQCh. 13 - Prob. 34DOQCh. 13 - A search for overstated property, plant, and...Ch. 13 - The following are typical questions that might...Ch. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Chem-Lite, Inc., maintains its accounts on the...Ch. 13 - Prob. 39PCh. 13 - You are reviewing the property, plant, and...
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