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6. On January 1, 2017, Frostburg Company purchased for $68,500,...

6. On January 1, 2017, Frostburg Company purchased for $68,500, equipment having a service life of six years and an estimated residual value of $4,000. Frostburg has recorded depreciation of the equipment using the straight-line method. On December 31, 2019, before making any annual adjusting entries, the equipment was exchanged for new machinery having a fair value of $35,000. The transaction has commercial substance. Use this information for all General Journal entries (without explanation) required to record the events for December 31, 2019

 7. Bowie Company uses a calendar year. On December 31, 2018, after adjusting entries were posted, Bowie Company sold a machine which was originally purchased on January 1, 2015. The historical cost was $21,500, the salvage value assumed was $2,000 and the original estimated life was five years.. It was sold for $5,800 cash. Using this information, how much should be recorded on December 31 for the Gain or (Loss)? Round to whole dollars.


9. On January 2, 2019, Adelphi Company purchased a patent for $220,000 plus $9,000 in legal fees. On that date, the patent had a remaining legal life of 13 years. Adelphi Company expects to use the patent for 8 years after which time it will be worthless. How much is the annual amortization expense for 2019? Round to nearest whole dollar.


10. Annapolis Company was recently sold for $460,000. Annapolis had assets & liabilities appraised at the time of the sale in the amounts of:


Item Amount

Accounts Receivable assumed by buyer $93,000

Inventory $285,000

Property, Plant & Equipment (net) $580,000

Notes Payable assumed by buyer $625,000


Using this information, how much should be recorded as Goodwill for this transaction?





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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