Acc201wa6 - Chapter 10 P 10-1 1 Recording the acquisition of land and building Initial Valuation Fair Value Percent of Total Fair Value(Percent x

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Chapter 10 P 10-1 1. Recording the acquisition of land and building. Fair Value Percent of Total Fair Value Initial Valuation (Percent x 100,000) Land 75,000 62.5% 62,500 Building 45,000 37.5 37,500 120,000 100.0% 100,000 Land. ..................................................................................... 62,500 Building. ................................................................................ 37,500 Cash. ................................................................................ 100,000 2. Recording the acquisition of equipment for cash and a note. Equipment. ........................................................................... 37,037 Discount on note payable. .................................................... 2,963 Note payable. ................................................................... 40,000 Present value of note payments: PV = 40,000 (.92593) = 37,037
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3. Recording the acquisition of a truck by donation. Truck. .................................................................................... 2,500 Revenue - donation of asset. ........................................... 2,500 4. To capitalize organization costs. Organization cost expense. .................................................. 3,000 Cash. ................................................................................ 3,000 5. To record the purchase of machinery. Machinery (15,000 + 500). ................................................... 15,500 Cash. ................................................................................ 15,500 6. To record the acquisition of office equipment by the issuance of common stock. Office equipment. ................................................................. 5,500 Common stock. ................................................................ 5,500 7. To record the acquisition of land in exchange for cash and a note. Land. ..................................................................................... 20,000 Cash. ................................................................................ 2,000 Note payable. ................................................................... 18,000
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P 10-4 To reclassify various expenditures incorrectly charged to the intangible asset account. Organization cost expense. .................................................. 7,000 Prepaid insurance. ............................................................... 6,000 Copyright. ............................................................................. 20,000 Research and development expense. .................................. 40,000 Patent (3,000 + 12,000). ...................................................... 15,000 Franchise. ............................................................................. 40,000 Advertising expense. ............................................................ 16,000
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This note was uploaded on 10/16/2011 for the course ACCOUNTING 201 taught by Professor Evans during the Spring '11 term at Thomas Edison State.

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Acc201wa6 - Chapter 10 P 10-1 1 Recording the acquisition of land and building Initial Valuation Fair Value Percent of Total Fair Value(Percent x

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