KIMMEL_Acct_2e_ProblemCSolutions_ch09

Accounting: Tools for Business Decision Making

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Unformatted text preview: SOLUTIONS TO PROBLEMS Item Land Building Other Accounts 1 $320,000 2 $ 4,000 Land Improvements 3 12,000 4 $ 18,000 5 1,800 6 34,000 Land Improvements 7 27,000 8 6,200 Property Tax Expense 9 750,000 10 (6,000 ) $326,000 $796,800 9-1 PROBLEM 9-1C (a) Feb. 1 Land......................................................... 1,400,000 Cash.................................................. 1,400,000 Apr. 1 Depreciation Expense............................ 1,500 Accumulated Depreciation— Equipment.................................. 1,500 ($48,000 X 1/8 X 3/12) 1 Cash......................................................... 14,000 Accumulated Depreciation— Equipment........................................ 31,500 Loss on Disposal............................. 2,500 Equipment.................................. 48,000 Cost........................................... $48,000 Accum. depr.—Equipment..... 31,500 [($48,000 X 1/8) X 5 + $1,500)] Book value................................ 16,500 Cash proceeds......................... 14,000 Loss on disposal..................... $ 2,500 June 1 Cash......................................................... 1,300,000 Land.................................................. 900,000 Gain on Disposal............................. 400,000 Sept. 1 Equipment............................................... 96,000 Cash................................................... 96,000 Dec. 31 Depreciation Expense............................. 8,000 Accumulated Depreciation— Equipment.................................... 8,000 ($64,000 X 1/8) 31 Accumulated Depreciation— Equipment......................................... 64,000 Equipment.................................... 64,000 9-2 PROBLEM 9-2C PROBLEM 9-2C (Continued) Cost.......................................... $64,000 Accum. depr.—Equipment ($64,000 X 1/8 X 8)............... 64,000 Book value.............................. $ (b) Dec. 31 Depreciation Expense............................. 720,000 Accumulated Depreciation— Buildings...................................... 720,000 ($21,600,000 X 1/30) 31 Depreciation Expense............................. 890,000 Accumulated Depreciation— Equipment.................................... 890,000 $7,088,000* X 1/8................... $886,000 $96,000 X 1/8 X 4/12.............. 4,000 $890,000 *($7,200,000 – $48,000 – $64,000) (c) GOETHE CORPORATION Partial Balance Sheet December 31, 2008 Plant Assets* Land........................................................... $ 2,500,000 Buildings...................................................Buildings....
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KIMMEL_Acct_2e_ProblemCSolutions_ch09 - SOLUTIONS TO...

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