Question 3 - HA3- Principles-of-Accounting-Chapter-10-Plant-Asset-Solution.pdf - (This Problem Set is from the 6th Edition of Keiso the other editions

Question 3 - HA3- Principles-of-Accounting-Chapter-10-Plant-Asset-Solution.pdf

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(This Problem Set is from the 6 th Edition of Keiso , the other editions may have different figure value, but the way of solution is same, anyone having different figure just can replace the value, try it, it’s easy.) P10-1A Mendoza Company was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order . Debits Credit 10. Proceeds from salvage of demolished building $ 3,500 Instructions Analyze the foregoing transactions using the following column headings. Insert the number of each transaction in the Item space, and insert the amounts in the appropriate columns. For amounts entered in the Other Accounts column, also indicate the account title . Item Land Building Other Accounts P10-2A In recent years, Pablo Company purchased three machines. Because o f heavy turnover in the accounting department, a different accountant was in charge of selecting the de- preciation method for each machine, and each selected a different method. Information con- cerning the machines is summarized below . Salvage Useful Life Depr eciation Machine Acquired Cost Value in Years Method For the declining-balance method, the company uses the double-declining rate. For the units-of- activity method, total machine hours are expected to be 120,000. Actual hours of use in the first 3 years were: 2001, 24,000; 2002, 3 4,000; and 2003, 30,000. Instructions (a) Compute the amount of accumulated depreciation on each machine at December 31, 2002. 1 1/1/00 $86,000 $ 6,000 4 Straight-line 2 1/1/00 140,000 10,000 5 Declining-balance 3 1/1/01 80,000 8,000 5 Units-of-activity 1. $ 4,000 2. Real estate taxes on land paid for the 5,000 3. Full to building 700,000 4. costs for new 20,000 5. Cost of real estate as a plant site (land $100,000 and 145,000 6. Cost of parking lots and 14,000 7. fees on building 10,000 8. 2,000 9. Cost of demolishing building to make land suitable for of 15,000 $915,000
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