chap10soln[1] - SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE...

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Unformatted text preview: SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 10-1 $27,000 + $1,400 + $12,200 = $40,600 BRIEF EXERCISE 10-2 Expenditures Date Amount Capitalization Period Weighted-Average Accumulated Expenditures 3/1 $1,500,000 10/12 $1,250,000 6/1 1,200,000 7/12 700,000 12/31 3,000,000 $5,700,000 $1,950,000 BRIEF EXERCISE 10-3 Principal Interest 13%, 5-year note $2,000,000 $260,000 15%, 4-year note 3,500,000 525,000 $5,500,000 $785,000 Weighted-average interest rate = $785,000 = 14.27% $5,500,000 BRIEF EXERCISE 10-4 Weighted-Average X Interest = Avoidable Accumulated Expenditures Rate Interest $1,000,000 12% $120,000 950,000 14.27% 135,565 $1,950,000 $255,565 BRIEF EXERCISE 10-5 Truck ($80,000 X .63552).................................................................................. 50,842 Discount on Notes Payable................................................................................ 29,158 Notes Payable....................................................................................... 80,000 BRIEF EXERCISE 10-6 Fair Value % of Total Cost Recorded Amount Land $ 60,000 60/360 X $306,000 $ 51,000 Building 220,000 220/360 X $306,000 187,000 Equipment 80,000 80/360 X $306,000 68,000 $360,000 $306,000 BRIEF EXERCISE 10-7 Land (2,000 X $41)............................................................................................ 82,000 Common Stock (2,000 X $10)............................................................. 20,000 Paid-in Capital in Excess of Par........................................................ 62,000 BRIEF EXERCISE 10-8 Computer............................................................................................................ 3,700 Accumulated Depreciation............................................................................... 18,000 Truck.................................................................................................... 20,000 Cash...................................................................................................... 1,000 Gain on Disposal of Truck.................................................................. 700 BRIEF EXERCISE 10-9 Computer ($3,700 $700)................................................................................. 3,000 Accumulated Depreciation............................................................................... 18,000 Truck.................................................................................................... 20,000 Cash...................................................................................................... 1,000 BRIEF EXERCISE 10-10 Office Equipment............................................................................................... 5,000 Accumulated Depreciation............................................................................... 3,000 Loss on Disposal of Machine............................................................................ 3,000 Machine................................................................................................Machine....
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This note was uploaded on 08/31/2010 for the course AEM 3360 at Cornell University (Engineering School).

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chap10soln[1] - SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE...

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