Posted: July 17th, 2022

On August 21, Oldham Industries bought 100 acres of land in order

Part 1. Acquisition Cost On August 21, Oldham Industries bought 100 acres of land in order to expand its operations. The purchase price was $375,000. In addition, Oldham paid $30,000 in taxes and fees, $27,000 to remove two existing buildings, and $50,000 to grade and fill the land before it could be used. Oldham sold materials salvaged from the two buildings for $25,000.Calculate the amount that Oldham would record as the cost of the land and prepare the journal entry to record the purchase. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditAug 21To record purchase of land.Part 2. Depreciation Methods Hickman Labs purchases equipment for its plant on January 1 for $80,000. The equipment has an estimated useful life of 8 years and an estimated salvage value of $20,000. It is expected to produce 100,000 units during its useful life. The equipment produces 18,000 and 21,000 units in its first and second years or operation.Complete the following items. Enter your answers in the shaded boxes.a. What is the depreciation expense for the first two years using the straight-line method?Year 1Year 2b. What is the depreciation expense for the first two years using the double-declining-balance method? Hint: Depreciation Expense = (Straight-Line Rate of Depreciation x 2) x Net Book ValueYear 1Year 2c. What is the per unit depreciation expense using the units-of-activity method? Hint: The Depreciation Expense per Unit = (Cost – Salvage Value) / Useful Life in Unitsd. What is the depreciation expense for the first two years using the units-of-activity method? Hint: Depreciation Expense = Depreciation Expense per Unit x Actual Units of ActivityYear 1Year 2Part 3. Depreciation Expense On January 1, Merida Company pays $125,000 to purchase machinery that will be used in its production facility. The company believes the equipment will have a useful life of 4 years and estimates the equipment’s salvage value to be $25,000.Complete the following problems related to this purchase. Enter your answers in the shaded boxes.a. What is the annual depreciation expense using the straight-line method?b. Prepare a depreciation schedule showing the depreciation expense and net book value for the four years using the straight-line depreciation method.YearDepreciation ExpenseAccumulated DepreciationNet Book Value$0$125,0002013201420152016c. What is the rate of depreciation using the double-declining-balance method?d. Prepare a depreciation schedule showing the depreciation expense and net book value for the four years using the double-declining-balance depreciation method.YearDepreciation ExpenseAccumulated DepreciationNet Book Value$0$125,0002013201420152016Part 4. Asset Disposal Mojave Enterprises owns machinery that it purchased for $145,000, with accumulated depreciation of $80,000. It sells the machinery to Beck Industries on April 23.a. Calculate the gain or loss on the sale of the machinery if it sells it for $59,000 or $68,000 in cash.Sale AmountGain or Loss?Gain or Loss Amount$59,000$68,000b. Prepare the journal entries for each scenario1. $59,000 sale journal entry:General JournalDateAccount NamesDebitCreditApr 232. $68,000 sale journal entryGeneral JournalDateAccount NamesDebitCreditApr 23Part 5. Intangible Assets Bonobo Sounds has purchased the copyright to a song for $175,000 on January 1, 2013. The copyright owner is legally protected for 5 years. Bonobo plans to use the song to market its services for 7 years.Prepare the journal entries to record the purchase of the copyright on January 1, 2013, and its annual amortization expense on December 31, 2013. Hint: Amortization expense is based on the shorter of the legal life or the useful life.General JournalDateAccount NamesDebitCreditJan. 1To record purchase of copyright.General JournalDateAccount NamesDebitCreditDec. 31To record amortization of copyright.Worksheet Part 1. Current Liabilities a. Define current liabilities, identify where they are reported, and provide two examples of these liabilities. Answer in the space below.b. Paisley Electronics sells $16,500 in electronics equipment to customers on February 27. The sales tax rate on these sales is 6%. Prepare the journal entry to record the sales and the corresponding sales tax. Enter your answers in the shaded boxes below.General JournalDateAccount NamesDebitCreditFeb 27To record salesc. Fiesta Entertainment sells $67,000 worth of tickets in advance of a 5-day food and wine festival running June 22-26. All sales were for cash.Prepare the journal entries to record the advance ticket sales on June 15, and the revenue earned for the first day of the festival. Assume that each of the five days of the festival represents 1/5 of the advance ticket sales. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditJun 15To record unearned revenueGeneral JournalDateAccount NamesDebitCreditJun 22To record revenue earnedPart 2. Notes Payable a. Tangerine Labs borrows $126,000 on March 28, by signing a 90-day, 8% note.Prepare the journal entries to record the issuance of the note and the payment of the note at maturity.General JournalDateAccount NamesDebitCreditMar. 28To record noteGeneral JournalDateAccount NamesDebitCreditJun 25To record payment of note and interestb. On November 1, Sommers Inc. borrows $180,000 by signing a 2-year, 5% note. Annual interest is paid on June 30. Sommers has a December 31 year-end.Prepare the journal entries to record the issuance of the note and the accrued interest on December 31.General JournalDateAccount NamesDebitCreditNov. 1To record noteGeneral JournalDateAccount NamesDebitCreditDec. 31To record accrued interest on notePart 3. Bonds Winterbank Productions issues $4 million of 4-year, 8 percent bonds on January 1, 2013. Interest is payable on July 1 and January 1, and financial statements are prepared on December 31. Winterbank uses the straight-line amortization method.a. Prepare the journal entries for 2013, assuming the bonds were issued at 98.General JournalDateAccount NamesDebitCreditJan. 1General JournalDateAccount NamesDebitCreditJul. 1General JournalDateAccount NamesDebitCreditDec. 31b. Prepare the journal entries for 2013, assuming the bonds were issued at 103.General JournalDateAccount NamesDebitCreditJan. 1General JournalDateAccount NamesDebitCreditJul. 1General JournalDateAccount NamesDebitCreditDec. 31Worksheet Part 1. Partnerships and Corporations Use your own words to compare and contrast the characteristics of a partnership and the characteristics of a corporation. Use the Internet or your Fortis LIRN resources to support your answer, as appropriate. Be sure to cite your sources.Part 2. Common Stock On July 2, SpaceShifter Inc. issued 62,000 shares of $3.00 par value common stock. a. Prepare the journal entry if the shares are issued for $10.00 per share. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditJul. 2To record sale of stockb. Prepare the journal entry if the shares are issued for $6.00 per share. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditJul. 2To record sale of stockPart 3. Cash Dividends On November 23, Wheelhouse Entertainment declares a $180,000 dividend. Wheelhouse’s common stock has a $6 par value and 65,000 shares outstanding. Its preferred stock is 4%, $11 par, and 30,000 shares outstanding. Cope did not pay dividends for two years prior to the current year. The dividend is to be paid on December 31.a. Prepare the journal entries for the declaration and payment of the dividend if the preferred stock is cumulative. Hint: Determine the preferred stock payment first. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditNov 23To record declaration of dividendGeneral JournalDateAccount NamesDebitCreditDec 31To record payment of dividendb. Prepare the journal entries for the declaration and payment of the dividend if the preferred stock is noncumulative. Hint: Determine the preferred stock payment first. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditNov 23To record declaration of dividendGeneral JournalDateAccount NamesDebitCreditDec 31To record payment of dividendPart 4. Stockholders’ Equity Ralston Enterprises has a treasury stock balance of $300,000, a common stock balance of $2,500,000, a retained earnings balance of $3,200,000, a preferred stock balance of $600,000, and an additional paid-in capital balance of $1,000,000. Prepare the stockholders’ equity section of Ralston’s balance sheet. Enter your answers in the shaded boxes.Total Stockholders’ Equity

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