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Mgmt_200_Fall_2006_Exam_3(3,25)

Mgmt_200_Fall_2006_Exam_3(3,25) - Name PUID Purdue...

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Name: ________________________ PUID: ________________________ Purdue University Krannert School of Management MGMT 200 – Introductory Financial Accounting Fall 2006 Exam 3 – November 13, 2006 This exam consists of 4 questions on 8 pages (excluding this cover page and the present value tables’ page = 10 pages total) for a total of 100 points. Time allowed: 90 minutes. Answer all questions. To ensure full credit and to maximize partial credit, clearly show all supporting calculations. The exam is closed book. A calculator is permitted. Present value tables are provided on the last page. GOOD LUCK . Question 1 (25 points) ________ Question 2 (25 points) ________ Question 3 (25 points) ________ Question 4 (25 points) ________ TOTAL (100 points) ________
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Question 1. Property, Plant, and Equipment (25 points) Tribal Corporation purchased a machine used to stamp out metal parts on January 1, 2004. The machine cost $1,244,160. At the time of purchase the machine was estimated to have a useful life of 12 years and an estimated resale value at the end of year 12 of $92,160. Required: a. Prepare the journal entry to record depreciation expense for 2004 assuming Tribal Corporation elects to depreciate the machine using the straight-line method. b. Prepare the journal entry to record depreciation expense for 2005 assuming Tribal Corporation elects to depreciate the machine using the straight-line method. c. Due to a down-turn in the economy, Tribal Corporation undertook a restructuring in 2006 and sold the machine on May 1, 2006 for $880,000. Prepare the journal entries to
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