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chap10soln[1]

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

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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 0 0 \$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

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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 ................................................................................................ 9,000 Cash ...................................................................................................... 2,000 BRIEF EXERCISE 10-11 Truck 35,000 Accumulated Depreciation ............................................................................... 27,000 Loss on Disposal of Truck ................................................................................. 1,000 Truck .................................................................................................... 30,000 Cash ...................................................................................................... 33,000 BRIEF EXERCISE 10-12 Truck 35,000 Accumulated Depreciation ............................................................................... 17,000 Loss on Disposal of Truck ................................................................................. 1,000 Truck .................................................................................................... 20,000 Cash ...................................................................................................... 33,000 BRIEF EXERCISE 10-13 Only cost (b) is expensed when incurred. BRIEF EXERCISE 10-14 (a) Depreciation Expense (\$3,000 X 8/12) .................................................................. 2,000 Accumulated Depreciation ...................................................................... 2,000 (b) Cash .................................................................................................................... 10,500 Accumulated Depreciation ..................................................................................... 11,000 Machinery ................................................................................................. 20,000 Gain on Disposal of Machinery ............................................................... 1,500 BRIEF EXERCISE 10-15 (a) Depreciation Expense (\$3,000 X 8/12) .................................................................. 2,000 Accumulated Depreciation ...................................................................... 2,000 (b) Cash .................................................................................................................... 5,200 Loss on Disposal of Machinery .............................................................................. 3,800 Accumulated Depreciation ..................................................................................... 11,000 Machinery ................................................................................................. 20,000

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

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