original work only
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Problem 9-03A
Ivanhoe Company had the following assets on January 1, 2022.
| Item | Cost | Purchase Date | Useful Life (in years) | Salvage Value | ||||
| Machinery | $73,000 | Jan. 1, 2012 | 10 | $ 0 | ||||
| Forklift | 32,000 | Jan. 1, 2019 | 5 | 0 | ||||
| Truck | 38,400 | Jan. 1, 2017 | 8 | 3,000 |
During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,200. The truck was discarded on December 31. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)
| Date | Account Titles and Explanation | Debit | Credit | |
| choose a transaction date
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enter an account title
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enter a debit amount
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enter a credit amount
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| enter an account title
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enter a debit amount
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enter a credit amount
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| choose a transaction date
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enter an account title to record depreciation expense on forklift
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enter a debit amount
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enter a credit amount
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| enter an account title to record depreciation expense on forklift
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enter a debit amount
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enter a credit amount
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| (To record depreciation expense on forklift) | ||||
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enter an account title to record sale of forklift on June 30
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enter a debit amount
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enter a credit amount
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| enter an account title to record sale of forklift on June 30
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enter a debit amount
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enter a credit amount
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| enter an account title to record sale of forklift on June 30
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enter a debit amount
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enter a credit amount
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| enter an account title to record sale of forklift on June 30
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enter a debit amount
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enter a credit amount
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| (To record sale of forklift) | ||||
| choose a transaction date
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enter an account title to record depreciation expense on truck
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enter a debit amount
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enter a credit amount
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|
| enter an account title to record depreciation expense on truck
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enter a debit amount
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enter a credit amount
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| (To record depreciation expense on truck) | ||||
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enter an account title to record sale of truck on December 31
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enter a debit amount
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enter a credit amount
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|
| enter an account title to record sale of truck on December 31
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enter a debit amount
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enter a credit amount
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| enter an account title to record sale of truck on December 31
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enter a debit amount
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enter a credit amount
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| (To record sale of truck) | ||||
Brief Exercise 9-06
On January 1, 2022, the Sandhill Co. ledger shows Equipment $43,400 and Accumulated Depreciation $16,360. The depreciation resulted from using the straight-line method with a useful life of 10 years and a salvage value of $2,500. On this date, the company concludes that the equipment has a remaining useful life of only 2 years with the same salvage value. Compute the revised annual depreciation.
| The revised annual depreciation | $enter the revised annual depreciation in dollars
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Brief Exercise 9-07
Prepare journal entries to record these transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)
| (a) | Cullumber Company retires its delivery equipment, which cost $46,360. Accumulated depreciation is also $46,360 on this delivery equipment. No salvage value is received. | |
| (b) | Assume the same information as in part (a), except that accumulated depreciation for the equipment is $36,640 instead of 46,360. |
| No. | Account Titles and Explanation | Debit | Credit |
| (a) | enter an account title to record the transaction a
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enter a debit amount
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enter a credit amount
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| enter an account title to record the transaction a
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enter a debit amount
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enter a credit amount
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| (b) | enter an account title to record the transaction b
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enter a debit amount
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enter a credit amount
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| enter an account title to record the transaction b
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enter a debit amount
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enter a credit amount
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| enter an account title to record the transaction b
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enter a debit amount
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enter a credit amount
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Brief Exercise 9-11
Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2022 (in millions): other plant assets $958.0, land $240.0, patents and trademarks (at cost) $500.0, machinery and equipment $2,120.0, buildings $960.0, goodwill (at cost) $180.0, accumulated amortization $48.0, and accumulated depreciation $2,360. Prepare a partial balance sheet for Nike for these items. (List Property, Plant and Equipment in order of Land, Buildings and Machinery and Equipment.)
| NIKE, INC. Partial Balance Sheet As of May 31, 2022 (in millions) | ||||||
| select an opening name for subsection one
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| select a balance sheet item
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$enter a dollar amount
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| select a balance sheet item
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$enter a dollar amount
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| select a balance sheet item
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enter a dollar amount
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| select a balance sheet item
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enter a dollar amount
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| select between addition and deduction
: select a balance sheet item |
enter a dollar amount
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enter a subtotal of the four previous amounts
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| select a closing name for subsection one
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enter a total amount for subsection one
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| select an opening name for subsection two
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| select a balance sheet item
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enter a dollar amount
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| select a balance sheet item
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$enter a dollar amount
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| select between addition and deduction
: select a balance sheet item |
enter a dollar amount
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enter a subtotal of the two previous amounts
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| select a closing name for subsection two
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enter a total amount for subsection two
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Brief Exercise 9-13
Blossom Chemicals Company acquires a delivery truck at a cost of $35,000 on January 1, 2022. The truck is expected to have a salvage value of $3,500 at the end of its 4-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method.
| First Year | Second Year | |||
| Annual depreciation under declining-balance method | $Enter a dollar amount
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$Enter a dollar amount
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Property, Plant and Equipment
Land
240.0
Buildings
960.0
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