Ch08 - Student Name: Class: Problem 08-03 Requirement 1:...

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Student Name: Class: Problem 08-03 Requirement 1: PLUMMER'S MARTIAL ARTS CENTER Machine Purchases Machine A B C Total Purchase price Installation costs Renovation costs Total cost Requirement 2: Depreciation at end of year 1: Machine Method Depreciation A Straight-line B Units-of-production C Double-declining-balance PLUMMER'S MARTIAL ARTS CENTER General Journal Account Debit Credit Depreciation expense Accumulated depreciation, Machine A Accumulated depreciation, Machine B Accumulated depreciation, Machine C
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Given P08-03: PLUMMER'S MARTIAL ARTS CENTER Machine Purchases Machine A Machine B Machine C Amount paid for asset 11,000 30,000 8,000 Installation costs 500 1,000 500 Renovation costs prior to use 2,500 1,000 1,500 Operating hours at end of first year 4,800 Estimates Residual Machine Life Value Depreciation Method A 5 years $1,000 Straight-line B 60,000 hrs 2,000 Units-of-production C 4 years 1,500 Double-declining-balance
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Student Name: Class: Problem 08-04 BEST BUY CO., INC. Requirement 1: Depreciation expense recorded in current year Requirement 2: Effect of failure to record depreciation: Ratio Computation Effect on Ratio Earnings Net income per share # of shares of stock outstanding Fixed asset Sales turnover Average net fixed asset balance Current Current assets Ratio Current liabilities Return on Net income assets Average total assets
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Given P08-04 BEST BUY CO., INC. Excerpt from Annual Report Consolidated Balance Sheets February 28 March 1 2009 2008 (in thousands) Assets Property and Equipment Land and buildings 755 732 Leasehold improvements 2,013 1,752 Fixtures and equipment 4,060 3,057 Property under capital lease 112 67 6,940 5,608 Less: Accumulated depreciation 2,766 2,302 Net property and equipment 4,174 3,306
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Student Name: Class: Problem 08-05 Requirement 1: FORD MOTOR COMPANY Depreciation Schedules a. Straight-line: Depreciation Accumulated Net Book Year Computation Expense Depreciation Value At acquisition 1 ($106,000-$2,000) X 1/13 2 b. Units of Production: Units of Production calculation: per unit of output Depreciation Accumulated Net Book Year Computation Expense Depreciation Value At acquisition 1 2 c. Double-declining-balance: Depreciation Accumulated Net Book Year Computation Expense Depreciation Value At acquisition 1 2 Requirement 2: Cash Flow: Fixed asset turnover: EPS: Recommendation to Ford Motor Company's management:
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Given P08-05 FORD MOTOR COMPANY Machine Information Cost $106,000 Useful life in years 13 Estimated residual value $2,000 Estimated useful life in output 200,000 units Actual output year 1 20,000 units Actual output year 2 16,000 units
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Student Name: Class: Problem 08-06 Requirement 1: JENSEN COMPANY General Journal Account Debit Credit Machine A - Jan. 1, 2012 (1) Depreciation expense in 2012: (2) To record disposal: Machine B - Dec. 31, 2012 (1) Depreciation expense in 2012: (2) To record disposal: Machine C - Jan. 1, 2012 (1) Depreciation expense in 2012: (2) To record disposal: Requirement 2: Accounting rationale for journal entries recording machine disposal: Machine A: Machine B: Machine C:
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Ch08 - Student Name: Class: Problem 08-03 Requirement 1:...

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