{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

exercise 23 - ACCOUNTING Exercise 23 Microsoft 1 ECONOMIC...

Info icon This preview shows pages 1–64. Sign up to view the full content.

View Full Document Right Arrow Icon
1 ACCOUNTING Exercise 23 Microsoft
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 ECONOMIC EVENTS 1. Spend $20,000,000 for software development costs to get to the point of having a viable software product 2. Spend $8,000,000 for software development costs for final software refinements, after reaching the point of having a viable software product 3. Spend $2,000,000 for documentation, training materials, CD duplication and packaging 4. Sell software CDs for $40,000,000 on credit. Included in the price is $5,000,000 for customer support to be delivered over two years 5. Record software cost of sales of 1,000,000 6. Record software production cost amortization (four years anticipated sales) 7. Spend $2,000,000 for customer support costs 8. Recognize the first year of customer support revenue 9. Record depreciation on the computers…DDB method, 4 year lives 10. Sell the equipment for $2,000,000 11. Sell the treasury shares for $1,000,000
Image of page 2
3 ECONOMIC EVENTS 12. Record payroll. Gross pay is $30,000,000. Federal withholding is $3,000,000. State withholding is $1,000,000. FICA rate is 8%. SDI rate is 1%. Employees are paid the net amount. 13. Accrue payroll taxes. FICA rate is 8%, FUTA 2%, SUTA 4%. 14. Record amortization on the patent (20 year life, straight line). 15. Accrue $1,000,000 for vacations (to be taken within one year). 16. Accrue interest on the Bonds Payable (12%) 17. Transfer Net Income / Loss to Retained Earnings.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
4 JOURNAL ENTRIES 1. 2. 3. 4. 5.
Image of page 4
5 JOURNAL ENTRIES 6. 7. 8. 9. 10.
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6 JOURNAL ENTRIES 11. 12. 13. 14. 15.
Image of page 6
7 JOURNAL ENTRIES 16. 17. 18. 19. 20.
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
8 Cash Reference Transaction Current Balance Debit Credit Debit Credit 400,000,000
Image of page 8
9 Computers Reference Transaction Current Balance Debit Credit Debit Credit 20,000,000
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
10 Equipment Reference Transaction Current Balance Debit Credit Debit Credit 3,000,000
Image of page 10
11 Equip Accum Depreciation Reference Transaction Current Balance Debit Credit Debit Credit 2,000,000
Image of page 11

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
12 Patent Reference Transaction Current Balance Debit Credit Debit Credit 2,000,000
Image of page 12
13 Bonds Payable Reference Transaction Current Balance Debit Credit Debit Credit 30,000,000
Image of page 13

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
14 Common Stock Reference Transaction Current Balance Debit Credit Debit Credit 20,000,000
Image of page 14
15 Paid in Capital Reference Transaction Current Balance Debit Credit Debit Credit 200,000,000
Image of page 15

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
16 Retained Earnings Reference Transaction Current Balance Debit Credit Debit Credit 175,000,000
Image of page 16
17 Treasury Stock Reference Transaction Current Balance Debit Credit Debit Credit 2,000,000
Image of page 17

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
18 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
Image of page 18
19 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
Image of page 19

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
20 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
Image of page 20
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern