Solultios.F09.Final

# Solultios.F09.Final - CONCORDIA UNIVERSITY DEPARTMENT OF...

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CONCORDIA UNIVERSITY FINANCIAL ACCOUNTING DEPARTMENT OF ACCOUNTANCY COMM 217 ALL SECTIONS SUGGESTED SOLUTION FINAL EXAMINATION Fall 2009 Question 1 (21 marks) Multiple-choice (1.5 marks per correct answer) 1. b 2. a 3. c 4. b 5. a 6. a 7. d 8. a 9. c 10. d 11. d 12. c 13. c 14. c

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Question 2 (16 marks) Req. 1 Total market value of two machines = \$240,000 + \$160,000 = \$400,000 Allocation of the purchase price: Machine A \$350,000 x (240,000/400,000) = \$210,000 Machine B \$350,000 x (160,000/400,000) = \$140,000 Req. 2 Equipment/Machinery (\$350,000 + \$2,000 + \$1,000) 353,000 Cash (\$353,000 – \$250,000 ) 103,000 Notes payable 250,000 Req. 3 Amortization of Machine A– 2009 = (\$212,000 – 0 ) x 2/10 = \$42,400 Amortization of Machine A– 2010 = (\$212,000 – 42,400 ) x 2/10 = \$33,920 Req. 4 Amortization rate per unit for Machine B = (\$140,000 + \$1,000 – \$6,000 ) / 100,000 = \$1.35 Accumulated amortization at September 30, 2009 = \$1.35 x 9,000 units = \$12,150 Net book value at September 30, 2009 = \$141,000 – 12,150 = \$128,850 Loss on sale of equipment = \$128,850 – \$125,000 = \$3850 Amortization Expense 12,150 Accumulated amortization 12,150 Cash 125,000 Accumulated amortization 12,150 Loss on sale of equipment 3,850 Equipment 141,000
Question 3 (21 marks) RT Ltd. Cash Flow Statement For the Year ended December 31, 2009 Operating activities Net income \$1,110,000

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