Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 6, Problem 6E
LO 8-1 Exercise 8-6 A Allocating costs for a basket purchase
Pitney Co. purchased an office building, land, and furniture for $500,000 cash. The appraised value of the assets was as follows:
| Land | $180,000 |
| Building | 300,000 |
| Furniture | 120,000 |
| Total | $600,000 |
Required
- a. Compute the amount to be recorded on the books for each asset.
- b. Show the purchase in a horizontal statements model like the following one:
- c. Prepare the general
journal entry to record the purchase.
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LO 2
Cash +
Land
Assets
+
Exercise 8-6A Allocating costs for a basket purchase
Jourdan Company purchased a restaurant building, land, and equipment for $700,000 cash. The
appraised value of the assets was as follows:
Land
Building
Equipment
Total
Building + Equip.
Required
a. Compute the amount to be recorded on the books for each of the assets.
b. Record the purchase in a horizontal statements model like the following one.
$160,000
400,000
240,000
$800,000
= Liab. + Equity Rev.
Exp.
c. Prepare the general journal entry to record the purchase.
= Net Inc.
Cash Flow
ng Objective 1
S10-1 Determining the cost of an asset
Highland Clothing purchased land, paying $96,000 cash and signing a $300,000 note
payable. In addition, Highland paid delinquent property tax of $1,100, title insurance
costing $600, and $4,600 to level the land and remove an unwanted building. Record
the journal entry for purchase of the land.
Brief Exercise 8-5 (Algo) Effect of the disposal of plant assets on the financial statements LO 8-5
Mix & Match Company sold office equipment with a cost of $48,600 and accumulated depreciation of $33,000 for $28,000 cash.
Required:
a. What is the amount of gain or loss on the disposal?
b. How would the sale affect net income (increase, decrease, no effect)?
c. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect)?
d. How would the event affect the statement of cash flows (inflow, outflow, no effect)?
a.
b. Effect of sale on net income
c. Effect of sale on total assets
d. Effect of sale on statement of cash flows
Chapter 6 Solutions
Survey Of Accounting
Ch. 6 - 1. What is the difference between the functions of...Ch. 6 - Prob. 2QCh. 6 - Prob. 3QCh. 6 - 4. Define depreciation. What kind of asset...Ch. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - 8. Explain the historical cost concept as it...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - 12. Explain straight-line, units-of-production,...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - 17. What is salvage value?Ch. 6 - Prob. 18QCh. 6 - Prob. 19QCh. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - 22. Why would a company choose to depreciate one...Ch. 6 - Prob. 23QCh. 6 - 27. How are capital expenditures made to improve...Ch. 6 - Prob. 25QCh. 6 - Prob. 26QCh. 6 - Prob. 27QCh. 6 - Prob. 28QCh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - LO 8-1 Exercise 8-6 A Allocating costs for a...Ch. 6 - Effect of depreciation on the accounting equation...Ch. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Events related to the acquisition, use, and...Ch. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Accounting for acquisition of assets, including a...Ch. 6 - Calculating depreciation expense using three...Ch. 6 - Determining the effect of depreciation expense on...Ch. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Revision of estimated salvage value Delta Machine...Ch. 6 - Purchase and use of tangible asset: Three...Ch. 6 - Recording continuing expenditures for plant assets...Ch. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Performing ratio analysis using real-world data...Ch. 6 - Prob. 1ATCCh. 6 - ATC 6-3 Research Assignment Comparing Microsofts...Ch. 6 - Prob. 4ATCCh. 6 - ATC 6-5 Ethical Dilemma Whats an expense? Several...
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Cost of paving parking lot to be used by customers 32,000 m. Cost of trees and shrubbery planted 11,000 n. Cost of floodlights installed on parking lot 2,000 o. Cost of repairing vandalism damage during construction 2,500 p. Proceeds from insurance company for windstorm and vandalism damage 7,500 q. Payment to building contractor for new building 800,000 r. Interest incurred on building loan during construction 34,500 s. Refund of premium on insurance policy (h) canceled after 11 months 500 Instructions 1.Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. 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