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Mgmt 200 Assignment Soln 3-9-11

# Mgmt 200 Assignment Soln 3-9-11 - 1,250 15,750 2 12,500...

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Management 200 – Introductory Financial Accounting– Spring 2011 Krannert School of Management - Purdue University Solutions to class assignment for March 9, 2011 Additional Perspective 7-1 Requirement 1 Purchase price \$12,000 Painting and new logo 3,000 Deluxe roof rack and trailer hitch 2,000 Total \$17,000 Requirement 2 Annual insurance of \$1,800 is expensed as incurred over the period from July 1, 2013 to June 30, 2014. Requirement 3 Great Adventures Calculation End of Year Amounts Year Allocation Base* X Depreciation Rate = Depreciation Expense Accumulated Depreciation Book Value** 1 12,500 0.20x1/2 1,250
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Unformatted text preview: 1,250 15,750 2 12,500 0.20 2,500 3,750 13,250 3 12,500 0.20 2,500 6,250 10,750 4 12,500 0.20 2,500 8,750 8,250 5 12,500 0.20 2,500 11,250 5,750 6 12,500 0.20x1/2 1,250 12,500 4,500 Total 12,500 * \$17,000 – \$4,500 = \$12,500 ** \$17,000 cost minus accumulated depreciation Note that year 1 goes from July 1, 2013 to June 30, 2014. Depreciation expense in 2013 is only six months of \$2,500 x 6/12 = \$1,250. Requirement 4 July 1, 2015 Debit Credit Cash 10,000 Accumulated Depreciation 5,000 Loss on Sale 2,000 Equipment 17,000 (to record loss on sale)...
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