chap11soln[1] - SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE...

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SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 11-1 2007: ($42,000 – $2,000) X 23,000 = $5,750 160,000 2008: ($42,000 – $2,000) X 31,000 = $7,750 160,000 BRIEF EXERCISE 11-2 (a) $60,000 – $6,000 = $6,750 8 (b) $60,000 – $6,000 X 4/12 = $2,250 8 BRIEF EXERCISE 11-3 (a) ($60,000 – $6,000) X 8/36* = $12,000 (b) [($60,000 – $6,000) X 8/36] X 9/12 = $9,000 *[8(8 + 1)] ÷ 2 BRIEF EXERCISE 11-4 (a) $60,000 X 25%* = $15,000 (b) ($60,000 X 25%) X 3/12 = $3,750 BRIEF EXERCISE 11-5 Depreciable Base = ($25,000 + $200 + $125 + $500 + $475) – $3,000 = $23,300. BRIEF EXERCISE 11-6 Asset Depreciation Expense A ($70,000 – $7,000)/10 = $6,300 B ($50,000 – $10,000)/5 = 8,000 C ($82,000 – $4,000)/12 = 6,500 $20,800 Composite rate = $20,800/$202,000 = 10.3% Composite life = $181,000*/$20,800 = 8.7 years BRIEF EXERCISE 11-7 Annual depreciation expense: ($7,000 – $1,000)/5 = $1,200 Book value, 1/1/08: $7,000 – (2 x $1,200) = $4,600 Depreciation expense, 2008: ($4,600 – $500)/2 = $2,050 BRIEF EXERCISE 11-8 Recoverability test: Future net cash flows ($500,000) < Carrying amount ($540,000); therefore, the asset has been impaired. Journal entry: Loss on Impairment . .............................................................. 140,000
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Accumulated Depreciation . ......................................... 140,000 BRIEF EXERCISE 11-9 Inventory . .............................................................................................. 72,625 Accumulated Depletion . ....................................................... 72,625 $400,000 + $100,000 + $75,000 – $160,000 = $103.75 per ton 4,000 BRIEF EXERCISE 11-10 (a) Asset turnover ratio: $7,109 = 1.104 times $6,205 + $6,675 2 (b) Profit margin on sales: $647 = 9.1% $7,109 (c) Rate of return on assets: (1) 1.104 X 9.1% = 10.05% (2) $647 = 10.05% $6,205 + $6,675
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chap11soln[1] - SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE...

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