Part 1. Depreciation calculations from Chapter 10 using


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Acct quiz help quiz 3.rtf Part 1. Depreciation calculations from Chapter 10 using straight-line, units of production and double-declining balance. Accumulated depreciation balances, Net Book Values. Please use the following information to answer the next series of questions. Each correct answer is worth 4 points, or 40 total points for this part. Due to age of production equipment, ACAP Enterprises purchased new equipment on January 1, 2012. The following information applies to this equipment. Cost is $849,000 Estimated residual value is $49,000 Estimated useful life is 5 years The equipment has estimated hours of use totaling 32,000 machine hours In 2012 the equipment was used for 6,000 actual machine hours In 2013 the equipment was used for 7,500 actual machine hours HINT: To determine the correct answers for some of the questions related to 2013, you need to consider what happened in 2012. Pay close attention to the way residual (salvage) value is used with each method. SHOW YOUR WORK! 1.1 What is the JE to record depreciation expense for 2012 if the Straight-line method is used? 1.2 What is the (net) book value of the asset at the end of 2012 (assuming straight-line)? 1.3 What is the balance in Accumulated Depreciation after 5 years (end of 2016) (assuming straight-line)? ************** 1.4 What is the JE to record depreciation expense for 2012 if the units-of-production method is used? 1.5 What is the (net) book value of the asset at the end of 2013 (assuming the units-of-production method)? 1.6 What is the balance in Accumulated Depreciation after 2 years (end of 2013) (assuming units-of-production method)? ************** 1.7 What is the JE to record depreciation expense for 2012 if the double-declining balance (DDB) is used? 1.8 What is the (net) book value of the asset at the end of 2012 (assuming DDB)? 1.9 What is the JE to record depreciation expense for 2013 if the double-declining balance (DDB) is used? 1.10What is the balance in Accumulated Depreciation after 2 years (end of 2013) (assuming DDB is used)? Part 2. Journal entries to record the sale of plant assets. Chapter 11. Please prepare the following journal entries to record the disposal of plant assets. Each journal entry is worth 6 points (12 points) Merrimac Commercial Ovens rents ovens to small bakeries on an hourly basis. It is time to replace some of the cooking and refrigeration equipment. The ovens are recorded at a cost of $96,000. Accumulated Depreciation is $61,000. A salvage dealer has offered to buy the ovens for $39,000 cash. The refrigeration equipment has a recorded cost of $75,000, and accumulated depreciation is $70,000. The equipment can be sold for $3,500. 1. Record the journal entry for the sale of the ovens 2. Record the journal entry for the sale of the refrigeration equipment HINT: You need to record a Gain or a Loss on the sale of the plant assets Part 3. Issuing common stock (Chapter 12). Record journal entries for the following three events, for three different companies. Each journal entry is worth 6 points (18 total points) 3.1 The Miller Corporation is a public company. Recently, the company authorized the issuance of the sale of 1,000,000 shares of $5 par value common stock for $18 per share. Record the journal entry to record the sale of stock. 3.2 The Nexus Company is a new company. The company issued 50,000 shares of no-par stock for $22 per share. Record the journal entry to record the sale of stock. 3.3 Burning Candles Inc. has just formed by issuing stock. The major stockholders are 2 sisters. Carol has contributed land with a fair value of $40,000 in exchange for 10,000 shares of $1 par value common stock. Carol’s sister, Beverly paid $60,000 in exchange for 15,000 shares of $1 par value common stock. Record the journal entry to record the sale of stock. Part 4. Paying Dividends on Preferred stock (Chapter 13). Record journal entries for the declaration and subsequent payment of Divid

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