Mgmt 200 Assignment Soln 3-7-11

# Mgmt 200 Assignment Soln 3-7-11 - Management 200...

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Management 200 – Introductory Financial Accounting– Spring 2011 Krannert School of Management - Purdue University Solutions to class assignment for March 7, 2011 Problem 7-4A 1. Capitalize 2. Expense 3. Capitalize 4. Capitalize 5. Expense 6. Expense Health Services could increase reported earnings by improperly recording expenses as assets. For example, Health Services could record maintenance and repair expense to the equipment asset account. This would lower expenses and increase earnings reported in the current year. Problem 7-5A Requirement 1 University Car Wash Calculation End of Year Amounts Year Allocation Base* X Depreciation Rate = Depreciation Expense Accumulated Depreciation Book Value** 1 210,000 1/6 35,000 35,000 205,000 2 210,000 1/6 35,000 70,000 170,000 3 210,000 1/6 35,000 105,000 135,000 4 210,000 1/6 35,000 140,000 100,000 5 210,000 1/6 35,000 175,000 65,000 6 210,000 1/6 35,000 210,000 30,000 Total 210,000 * \$240,000 – \$30,000 = \$210,000 ** \$240,000 cost minus accumulated depreciation

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## This note was uploaded on 02/27/2012 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University.

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Mgmt 200 Assignment Soln 3-7-11 - Management 200...

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