Welcome, Guest

Want to take part in these discussions? If you have an account, sign in now.

If you don't have an account, apply for one now.

1. • CommentAuthorcoolgirl_shan
   • CommentTimeApr 13th 2008

    
   Prepare journal entries for the following: (13 marks)
   
   (a)November1, 2005~~~Purchased machinery for $66,000 with a $6,000 residual value and a five year life by paying $22,000 down and the balance with a Note Payable.
   (b)December 31,2005~~~Record the adjusting entry for depreciation using the straight line method to the nearest month.
   (c)July 1,2006 Sold the equipment for $55,000 cash and paid off the Note Payable.
   
   Part II
   
   Amigos, Inc., uses straight-line depreciation in its financial statements. On July 1, 2003, Amigos acquired a computer system at a cost of $40,000. Estimated useful life is six years, with residual value of $4,000.
   
   (a)Complete the following schedule, showing depreciation expense Amigos expects to recognize each year in the financial statements.
   Year~Depreciation Recognized in Financial Statement
   2003~$___________________
   2004~$___________________
   2005~$___________________
   2006~$___________________
   2007~$___________________
   2008~$___________________
   2009~$___________________
   
   (b) Assume Amigos sells the computer system on July 1, 2006, for $10,500.
   For financial statement purposes, compute the book value of the computer system at date of disposal and the gain or loss on disposal(Indicate gain or loss.)
   Book Value(date of sale) $___________________
   Gain or loss on disposal $___________________
2. • CommentAuthoroldjay456
   • CommentTimeMay 10th 2008 edited

    
   (a) Dr. machinery 66,000
   Cr. Cash 22,000
   Cr. Note payable 44,000
   (b) Dr. Depreciation Expenses 2,000
   Cr. Accumulated Depreciation 2,000
   (c) Dr. Cash 55,000
   Accumulated Depreciation 8,000
   Loss on Disposal 3,000
   Cr. Machinery ( Equipment ) 66,000
   
   Dr. Note Payable 44,000
   Cr. Cash 44,000
3. • CommentAuthoroldjay456
   • CommentTimeMay 10th 2008

    
   Part II
   
   (a)
   
   2003~$3000___________________
   2004~$6000___________________
   2005~$6000___________________
   2006~$6000___________________
   2007~$6000___________________
   2008~$6000___________________
   2009~$3000___________________
   
   (b)
   
   Book Value(date of sale) $22,000___________________
   Gain or loss on disposal $-11500 ( Loss ) ___________________
4. • CommentAuthormomma4_5
   • CommentTimeMay 12th 2008

    
   you know I have no prob with helping people but I really hate it when people post the exact problem. Can you try to figure it out yourself???