1.Garcia Corporation purchased a truck by issuing an $95,200, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.
2. Boyne Inc. had beginning inventory of $13,320 at cost and $22,200 at retail. Net purchases were $133,200 at cost and $188,700 at retail. Net markups were $11,100; net markdowns were $7,770; and sales were $174,270. Compute ending inventory at cost using the conventional retail method.
3.Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $374,850. The estimated fair values of the assets are land $71,400, building $261,800, and equipment $95,200. At what amounts should each of the three assets be recorded?
4.ielder Company obtained land by issuing 2,000 shares of its $13 par value common stock. The land was recently appraised at $109,650. The common stock is actively traded at $53 per share. Prepare the journal entry to record the acquisition of the land
5.Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2012, for $52,060. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years. Prepare Celine Dion's journal entries to record the purchase of the patent and 2012 amortization.
6.Karen Austin Corporation has capitalized software costs of $858,500, and sales of this product the first year totaled $423,660. Karen Austin anticipates earning $988,540 in additional future revenues from this product, which is estimated to have an economic life of 5 years. Compute the amount of software cost amortization for the first year.
| (a) |
Compute the amount of software cost amortization for the first year using the percent of revenue approach. |
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| (b) |
Compute the amount of software cost amortization for the first year using the straight-line approach. |
7.oley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $77,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of $1,350. On July 3, Roley returned damaged goods and received credit of $7,700. On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley.
8.Takemoto Corporation borrowed $85,800 on November 1, 2012, by signing a $87,731, 3-month, zero-interest-bearing note. Prepare Takemoto's November 1, 2012, entry; the December 31, 2012, annual adjusting entry; and the February 1, 2013, entry
9.On January 1, 2012, Irwin Animation sold a truck to Peete Finance for $26,550 and immediately leased it back. The truck was carried on Irwin's books at $19,250. The term of the lease is 5 years, and title transfers to Irwin at lease-end. The lease requires five equal rental payments of $7,365 at the end of each year. The appropriate rate of interest is 12%, and the truck has a useful life of 5 years with no salvage value. Prepare Irwin's 2012 journal entries.