Name:
Intermediate Accounting I, Fall Semester 2005
Review Questions, Exam #5, Chapters 10 and 11 | |
|1. |Spencer Company purchased manufacturing equipment at a cost of $500,000 with terms of 2/10 n/60. Payment was made within the |
| |discount period. Freight charges to get the equipment delivered to the manufacturing plant were $7,000 including in transit |
| |insurance. The company paid a contractor to remodel the manufacturing plant to accommodate the new equipment at a cost of |
| |$22,000. Installation costs totaled $15,000. The capitalized cost of the manufacturing equipment is: |
|2. |Spencer Company purchased the net assets of Bones, Inc. by paying $800,000 in cash. Spencer Company assumed all of the |
| |liabilities. Book values and fair values of acquired assets and liabilities were: |
| | |
| |[pic] |
| | |
| |Spencer Company would record goodwill of: |
|3. |Spencer Company began construction of a warehouse on May 1, 2003. The warehouse was finished and ready for use on September 30, |
| |2004. Expenditures on the project were as follows: |
| | |
| |[pic] |
| | |
| |Weighted-average accumulated expenditures for 2003 was: |
|4. |Spencer Company purchased manufacturing equipment for $60,000 on August 1, 2002. The equipment is expected to have a ten-year |
| |life, with a residual value of $5,000. |
| | |
| |Using the double-declining balance method, depreciation expense for 2003 and book value at December 31, 2003 would be: |
|5. |On April 1, 2003, Spencer Company purchased a specialized piece of machinery that has an expected capacity of 200,000 units and |
| |an estimated residual value of $100,000. The cost of the machinery was $600,000 and is to be depreciated using the |
| |units-of-production method. During nine months of 2003, 20,000 units of product were produced. During 2004, 50,000 units were |
| |produced. At the end of 2004, engineers estimated that the machine can realistically be used to produce only another 100,000 |
| |units. |
| | |
| |Calculate the amount of depreciation expense that Spencer Company would report in 2003 and 2004. |
|6. |Spencer Company has a fiscal year end of June 30. On November 1, 2003 the company purchased a delivery van for $65,000. The van|
| |is expected to have a five-year life, with a residual value of $5,000. Using the straight-line method, depreciation expense for|
| |fiscal year ended June 30, 2004 will be how much? |
|7. |Spencer Company traded a Chevy truck for a Ford truck in 2004. The Chevy truck originally cost $80,000 and had accumulated |
| |depreciation up to the date of exchange of $60,000. In exchange Spencer Company paid $6,000 and received the Ford truck with a |
| |fair market value of $24,000. |
|A) |Using the format provided, show the calculation of the gain to be recognized from the exchange and the basis in the Dodge truck.|
| | |
| |[pic] |
|B) |In the format provided prepare the journal entry to record the exchange. |
| | |
| |[pic] |
| |. |
|8. |On February 1, 2003, Spencer Company began construction of an office building. The office building was completed and ready for |
| |occupancy on September 30, 2003. The following is a schedule of expenditures during the construction period. |
| | |
| |[pic] |
|A) |Using the format provided calculate the weighted-average accumulated expenditures. |
| | |
| |[pic] |
|B) |The company had the following outstanding debt during 2003: |
| | |
| |[pic] |
| | |
| |In the format provided calculate the weighted-average interest rate (cost of capital). |
| | |
| |[pic] |
|C) |Using the format provided calculate the avoidable interest. |
| |[pic] |
|D) |Using the format provided calculate the total interest incurred for the period. |
| | |
| |[pic] |
|D) |Assuming that interest payments and accruals are recorded as a debit to interest expense throughout the year, using the format |
| |provided prepare the year-end adjusting journal entry to capitalize interest associated with the construction of the warehouse. |
| | |
| |[pic] |
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- company name and stock symbol
- why your name is important
- native american name generator
- why is my name important
- why is god s name important
- last name that means hope
- name for significant other
- name synonym list
- me and name or name and i
- name and i vs name and me
- name and i or name and myself
- name and i or name and me