Q1) HeFlin Company incurs these expenditures in purchasing a truck: cash price $17,700; accident insurance (during use) $1,810; sales taxes $1,300; motor vehicle license $240; and painting and lettering $1,230.
What is the cost of the truck?
Q2 )Apex Chemicals Company acquires a delivery truck at a cost of $23,800 on January 1, 2007. The truck is expected to have a salvage value of $4,300 at the end of its 5-year useful life. Compute annual depreciation for the first and second years using the straight-line method. (Round your answers to 0 decimal places.)
Q3) Prepare journal entries to record these transactions: (For multiple debit/credit entries, list in order of magnitude.)
(a) Blaska Company retires its delivery equipment, which cost $44,200. Accumulated depreciation is also $44,200 on this delivery equipment. No salvage value is received.
(b) Assume the same information as in part (a), except that accumulated depreciation for Blaska Company is $37,020 instead of $44,200.
Q4) Jazz Company purchases a patent for $189,000 on January 2, 2007. Its estimated useful life is 4 years.
(a) Prepare the journal entry to record amortization expense for the first year. (Round your answers to 0 decimal places.)
(b) Show how this patent is reported on the balance sheet at the end of the first year.
Q5) In its 2004 annual report, McDonald's Corporation reports beginning total assets of $25.5 billion; ending total assets of $27.8 billion; net sales of $19.1 billion, and net income of $2.3 billion. (Round your answers to 2 decimal places.)
(a) Compute McDonald's return on assets ratio.
(b) Compute McDonald's asset turnover ratio.