Sample_Review_Problems

Sample_Review_Problems - Management 120A Review Problems In...

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Management 120A Review Problems Page | 1 In its 2001 annual report to shareholders, Plank Breweries Inc. disclosed the following footnote: 4. Fixed Assets Fixed assets consist of the following: December 31, ------------------------------- 2001 2000 -------------- -------------- Brewery and retail $ 14,465,637 $ 14,246,061 equipment Furniture and fixtures 918,879 772,562 Leasehold improvements 13,808,247 13,563,615 Construction in 584,855 165,555 progress Assets held for sale - 3,832 ---------- ---------- 29,777,618 28,751,625 Less accumulated (9,555,058 ) (7,625,733 ) depreciation ---------- ---------- $ 20,222,560 $ 21,125,892 ---------- ---------- Total depreciation expense was approximately $2,121,000 and $2,179,000 for the years ended December 31, 2001 and 2000, respectively. Also, Plank Breweries reported the following information in its annual report: Years Ended December 31, ----------------------------------- 2001 2000 -------------- -------------- Acquisition of fixed 1,279,250 808,485 assets Proceeds from sale 15,147 157,707 of fixed assets Required: Use a T- account to show the balances and changes during 2001 in Plank Breweries’: a. Fixed assets account. b. Accumulated depreciation—fixed assets account. Fixed assets Acc.Deprec.-- Fixed assets Beg. Balance Beg. Balance Purchases Disposals Acc. Deprec. Depreciation Exp. on disposals End. Balance End. Balance
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Management 120A Review Problems Page | 2 Daley Industries took out a $1,500,000, 9% construction loan on January 1, 2010, to build a new production facility. Construction started on April 1. Daley made payments to the general contractor of $400,000 on June 30, $900,000 on August 31, and $500,000 on December 31. Required: Compute the amount of interest that Daley would capitalize in 2010 using the specific interest rate method. The Columbus Crew exchanged land for equipment and received $10,000 in cash. The book value and the fair value of the land were $80,000 and $90,000, respectively. Record the journal entry: On January 1, 2010, Bactin Corporation acquired 10% of Oakton Company for $100,000. On that date, the book value and fair value of Oakton's net assets was $900,000. Any difference between cost and book value is attributable to goodwill. In 2010, Oakton reported net income of $60,000 and paid dividends of $30,000. On January 1, 2011, Bactin Corporation bought another 10% of Oakton for $100,000. The value of net assets was $900,000. In 2011, Oakton reported net income of $80,000 and paid dividends of $40,000. Required: Prepare all journal entries for Bactin for 2003 and 2004 assuming no change in market value of the Oakton stock during that time period.
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Management 120A Review Problems Page | 3 Tiger Development Corp. purchased a 5-acre tract of land for a building site for $720,000. On the land
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Sample_Review_Problems - Management 120A Review Problems In...

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