2 on 50000 was paid to a contractor to landscape the

Info icon This preview shows pages 50–57. Sign up to view the full content.

View Full Document Right Arrow Icon
2. On March 31, 2012, $50,000 was paid to a contractor to landscape the area around a manufacturing plant including the installation of a sprinkler system. The expenditure was debited to the Land account. The landscaping is expected to have a 20-year useful life and no residual value. KJI uses the straight-line method of depreciation for all depreciable assets. Required: 1. Prepare the journal entries at December 31, 2013, to correct the errors (ignore income taxes). 2. Prepare the journal entries to record 2013 depreciation for any assets recorded in requirement 1.
Image of page 50

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
117. Zvinakis Mining Company paid $200,000 for the rights to mine lead in southeast Missouri. The cost to drill and erect a mine shaft was $2,400,000, and equipment to process the lead ore before shipment to the smelter was $1,800,000. The mine is expected to yield 2,000,000 tons of ore during the five years it is expected to be operating. The equipment has an estimated residual value of $150,000 when mining is concluded. The mine started operations on April 30, 2013. In 2013, 300,000 tons of ore were extracted, and in 2014, 700,000 tons were mined. Required: 1. Compute the depletion rate and the units-of-production depreciation rate. 2. Compute depletion and depreciation for 2013 and 2014.
Image of page 51
118. On February 20, 2013, Genoa Mining Company incurred costs of $3,600,000 to acquire and prepare to extract an estimated 4,000,000 tons of mineral deposits. In 2013, 450,000 tons of ore were mined. At the beginning of 2014, Genoa geologists estimated that 3,900,000 tons of ore still remained. In 2014, 700,000 tons of ore were mined. Required: Compute depletion for 2013 and 2014.
Image of page 52

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
119. On September 30, 2013, Morgan, Inc. acquired all of the outstanding common stock of Pathways, Inc., for $100 million. In addition to tangible assets, Morgan recorded the following assets as a result of the acquisition: Morgan's policy is to amortize intangible assets using the straight-line method, no residual value, and a six-year useful life. Required: What is the total amount of expenses that would appear in Morgan's income statement for the year ended December 31, 2013, related to these items?
Image of page 53
120. Meca Concrete purchased a mixer on January 1, 2011, at a cost of $45,000. Straight-line depreciation for 2011 and 2012 was based on an estimated eight-year life and $3,000 estimated residual value. In 2013, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only $2,000. Required: Compute depreciation for 2013 and 2014.
Image of page 54

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
121. Eckland Manufacturing Co. purchased equipment on January 1, 2011, at a cost of $90,000. Straight-line depreciation for 2011 and 2012 was based on an estimated eight-year life and $2,000 estimated residual value. In 2013, Eckland revised its estimate and now believes the equipment will have a total service life of only six years, while the residual value remains the same. Required: Compute depreciation for 2013 and 2014.
Image of page 55
122. Weaver Textiles Inc. has used the straight-line method to depreciate its equipment since it started business in 2009. At the beginning of 2013, the company decided to change to the double-declining-balance (DDB) method. Depreciation as reported and as it would have been
Image of page 56

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 57
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern