Richard asks…
Accounting 101 help please?
1. A pressurized spray painter was purchased on September 1 of the fiscal year for $4,800. It has a useful life of 4 years and a residual value of $300. Determine depreciation expense for the first two years, assuming a fiscal year end of December 31 and using (a) the straight line method and (b) the declining-balance method. 2.
2. Equipment with a useful life of 5 years and a residual value of $6,000 was purchased on January 3, 2002 for $48,500. The machine was sold on January 5, 2007 for $13,000. (a) What is the book value of the machine on January 5, 2007 assuming that straight-line depreciation is used? (b) Illustrate the effects on the accounts and financial statements of the sale of the machine on January 5, 2007. (c) Illustrate the effects on the accounts and financial statements of the sale of the machine if it had been sold for $18,000 instead.
3. For each of the following items indicate whether the transactions listed below increase (+) decreased (-) or had no effect (o) by inserting the appropriate symbol
. Net Income, Assets, Liabilities, Qwners’ Equity, Cash Flows
(a) Record depreciation expense
(b) Sold equipment for cash at a loss
(c) Record loss on impaired Goodwill
(d) Record depletion expense
(e) Recorded a capital expenditure and issued a note payable
admin answers:
1. A pressurized spray painter was purchased on September 1 of the fiscal year for $4,800. It has a useful life of 4 years and a residual value of $300. Determine depreciation expense for the first two years, assuming a fiscal year end of December 31 and using
(a) the straight line method
(4,800 – 300) / 4 = 1,125 depreciation per year.
Year 1:
1,125 x 4/12 = $375 depreciation expense
Year 2:
$1,125 depreciation expense
(b) the declining-balance method. 2.
100% / 4 years = 25% straight-line depreciation rate
25% x 2 = 50% declining-balance rate
Year 1:
4,800 x 50% x 4/12 = $800 depreciation expense
Year 2:
First 8 months:
4,800 x 50% x 8/12 = 1,600 depreciation expense. Book value is now $2,400
Last 4 months:
2,400 x 50% x 4/12 = 400 depreciation expense
Total depreciation expense for year 2 = $2,000
2. Equipment with a useful life of 5 years and a residual value of $6,000 was purchased on January 3, 2002 for $48,500. The machine was sold on January 5, 2007 for $13,000.
(a) What is the book value of the machine on January 5, 2007 assuming that straight-line depreciation is used?
Since the equipment was depreciated for its full useful life of five years, the book value has been reduced all the way down to its salvage value of $6,000
(b) Illustrate the effects on the accounts and financial statements of the sale of the machine on January 5, 2007.
Dr Accumulated Depreciation 42,500 (assets increase)
Dr Cash 13,000 (assets increase)
Cr Equipment 48,500 (assets decrease)
Cr Gain on Disposal 7,000 (equity increases)
(c) Illustrate the effects on the accounts and financial statements of the sale of the machine if it had been sold for $18,000 instead.
Dr Accumulated Depreciation 42,500 (assets increase)
Dr Cash 18,000 (assets increase)
Cr Equipment 48,500 (assets decrease)
Cr Gain on Disposal 12,000 (equity increases)
3. For each of the following items indicate whether the transactions listed below increase (+) decreased (-) or had no effect (o) by inserting the appropriate symbol
(a) Record depreciation expense
Net Income, -
Assets, -
Liabilities, o
Qwners’ Equity, -
Cash Flows +
(b) Sold equipment for cash at a loss
Net Income, -
Assets, -
Liabilities, o
Qwners’ Equity, -
Cash Flows +
(c) Record loss on impaired Goodwill
Net Income, -
Assets, -
Liabilities, o
Qwners’ Equity, -
Cash Flows +
(d) Record depletion expense
Net Income, –
Assets, -
Liabilities, o
Qwners’ Equity, -
Cash Flows +
(e) Recorded a capital expenditure and issued a note payable
Net Income, o
Assets, +
Liabilities, +
Qwners’ Equity, o
Cash Flows o
Mary asks…
will obama admit his policies are not working or just keep asking for patience?
so were into the 2nd half of his first year and although the stock
market has stabliezed and gnp is not negative the banks are
still standing, we have a tremendous problem with unemployment
and reduced tax revenues.
now the only time tax revenues dropping is a problem is when your
spending too much and have too much budgeted. why not just
admit it. Instead spend more ?? now that sounds risky.
do you think there will be a time when obama admits and agrees
1) holding his hand out to iran and having it burned on national tv was a huge mistake and now his judgment appears to be impaired to observers.
2) banking his whole presidency on a single payor health system and then lying about it, and coming up with a trojan horse program deceitfully designed to hide the fact that its going to put private insurance out of business.
3) breaking every important campaign promise from closing gitmo
to not appionting donors to ambassadorships to not putting in extreme supreme court nominations, to bringing home troops, to not raising taxes on less than 250k incomes, to give avg americans a tax cut,
to use tarp money to buy up the toxic assets, instead of using it for employee bonuses. now can anyone admit this or am i seeing things???
admin answers:
He will keep asking for patience… Its a con game… You can’t let the players (America) know they are being scammed until it is to late for them to do anything about it.
Welcome to Obama-nation 09.
P.S.
We really ain’t seen nothin yet!
Susan asks…
Should I grow them Indoors, in a Greenhouse or outside in the garden?
Basically, I’ve seen these seeds for sale (in the link below) and I think there is a gap in the market where I can make quite a lot of money growing and selling them. The only problem is should I grow them indoors or outdoors? When I make enough money I could buy a greenhouse but until then it’s outside or inside. Has anyone had any experience growing these? If so is there any special requirements? I’m thinking of feeding them miracle grow to make them really big, but I don’t want this to impair the taste. Thankyou in advance for any help or advice you can share with me 
http://familyfun.go.com/assets/cms/printables/doughnut-seeds-printables-photo-420-FF0411CREAT_A17_retouched.jpg
admin answers:
Http://familyfun.go.com/printables/plant-some-laughs-1003660/
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