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SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 111
2010:
($50,000 – $2,000) X 23,000
= $6,900
160,000
2011:
($50,000 – $2,000) X 31,000
= $9,300
160,000
BRIEF EXERCISE 112
(a)
$80,000 – $8,000
= $9,000
8
(b)
$80,000 – $8,000
X 4/12 = $3,000
8
BRIEF EXERCISE 113
(a)
($80,000 – $8,000) X 8/36* = $16,000
(b)
[($80,000 – $8,000) X 8/36] X 9/12 = $12,000
*[8(8 + 1)] ÷ 2
BRIEF EXERCISE 114
(a)
$80,000 X 25%* = $20,000
(b)
($80,000 X 25%) X 3/12 = $5,000
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View Full Document *(1/8 X 2)
BRIEF EXERCISE 115
Depreciable Base = ($28,000 + $200 + $125 + $500 + $475) – $3,000 =
$26,300.
BRIEF EXERCISE 116
Asset
Depreciation Expense
A
($70,000 – $7,000)/10 =
$
6,300
B
($50,000 – $5,000)/5 =
9,000
C
($82,000 – $4,000)/12 =
6,500
$21,800
Composite rate = $21,800/$202,000 = 10.8%
Composite life = $186,000*/$21,800 = 8.5 years
*($63,000 + $45,000 + $78,000)
BRIEF EXERCISE 117
Annual depreciation expense: ($8,000 – $1,000)/5 = $1,400
Book value, 1/1/11: $8,000 – (2 x $1,400) = $5,200
Depreciation expense, 2011: ($5,200 – $500)/2 = $2,350
BRIEF EXERCISE 118
Recoverability test:
Future net cash flows ($500,000) < Carrying amount ($520,000);
therefore, the asset has been impaired.
Journal entry:
Loss on Impairment.
....................................
120,000
Accumulated Depreciation
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View Full Document ($520,000 – $400,000).
.......................
120,000
BRIEF EXERCISE 119
Inventory.
................................................................
73,500
Accumulated Depletion.
..............................
73,500
$400,000 + $100,000 + $80,000 – $160,000
= $105 per ton
4,000
700 X $105
= $73,500
BRIEF EXERCISE 1110
(a)
Asset turnover ratio:
$7,867
= 1.109 times
$7,745 + $6,445
2
(b)
Profit margin on sales:
$854
= 10.86%
$7,867
(c)
Rate of return on assets:
1.
1.109 X 10.86% = 12.04%
2.
$854
= 12.04%
$7,745 + $6,445
2
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View Full Document *BRIEF EXERCISE 1111
2010:
$50,000 X 20%
=
$10,000
2011:
$50,000 X 32%
=
16,000
2012:
$50,000 X 19.2%
=
9,600
2013:
$50,000 X 11.52%
=
5,760
2014:
$50,000 X 11.52%
=
5,760
2015:
$50,000 X 5.76%
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This note was uploaded on 08/31/2009 for the course DRXL 100 taught by Professor All during the Spring '09 term at Drexel.
 Spring '09
 All

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