Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 11, Problem 11.7BE
To determine
To prepare: Journal entries to record circle city transportation’s activity.
Given information:
Cost incurred for oil changes is $2,000.
Cost incurred for filter changes is $5,000.
Cost incurred for tire rotation is $3,000.
Cost incurred for engine overhaul is $15,000.
Cost for retrofitting buses to function as party busses is $40,000.
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Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to
be made in the special revenue fund will include
Multiple Choice
A credit to Gain on Sale of Equipment.
A debit to Accumulated Depreciation.
A credit to Equipment.
A credit to Other Financing Sources-Proceeds of Sale of Assets.
Oaktree Company purchased new equipment and made the following expenditures:
Purchase price
Sales tax
Freight charges for shipment of equipment
Insurance on the equipment for the first year
Installation of equipment
The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed
above were paid in cash.
Required:
Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
Recording Subsequent Expenditures
The plant building of Xon Corporation is old (estimated remaining useful life is 12 years) and needs continuous maintenance and repairs. The company’s accounts show that the building originally cost $300,000; and accumulated depreciation was $200,000 at the beginning of the current year. During the current year, expenditures relating to the plant building are made.
Prepare the journal entry to record each of the following expenditures , assuming all items are paid in cash.Instructions
Round your answers to the nearest whole number
Record debit accounts in alphabetical order using the first letter of the account name.
1. Continuing, frequent, and low-cost repairs: $17,000
Account Name
Dr.
Cr.
2. Added a new storage shed attached to the building; estimated useful life of 8 years: $36,000
Account Name
Dr.
Cr.
3. Removed roof with original cost, $40,000; replaced it with…
Chapter 11 Solutions
Intermediate Accounting
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- Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment The equipment, including sales tax, was purchased on open account with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 $50,000 2,700 750 958 1,500 2 Record the purchase of equipment.arrow_forwardIndigo Architecture made the following cash expenditures during its first year in operations: 1. 2. 3. 4. 5. 6. 7. 8. 9. (a1) Cost of real estate purchased as a plant site (land and building) Accrued property taxes paid at the time of the purchase of the real estate Cost of demolishing building to make land suitable for construction of a new building Architect's fees on building plans Excavation costs for new building Cost of filling and grading the land Full payment to building contractor Cost of parking lots and driveways Property taxes paid for the current year on the land Your answer is partially correct. $133,900 3,300 10,600 14,700 26,900 2.300 752,600 32,800 8,200 Record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)arrow_forwardEquipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. What would be journal entry that should be made in the special revenue fund (in debit and credit form)?arrow_forward
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