Discussion
Assets
Depending on the length of time, assets will either be categorized as current or long-term. Go to Yahoo Finance and select a company. Then, share either a current or long-term asset of the company and the type’s characteristics. Go to at least two other colleagues’ posts with the other type of asset and provide the difference between the types.
Assignment 1 ACC220 Week 6 Assignment
Assets
For this week’s assignment, address the following problems. Be sure to complete all steps and sections of the problem and show all your work.
1. During the current year, Arkells Inc. made the following expenditures relating to plant machinery.
2. Renovated five machines for $100,000 to improve efficiency in production of their remaining useful life of five years
3. Low-cost repairs throughout the year totaled $70,000
4. Replaced a broken gear on a machine for $10,000
5. What amount should be expensed during the period?
6. What amount should be capitalized during the period?
7. Jada Company had the following transactions during the year:
8. Purchased a machine for $500,000 using a long-term note to finance it
9. Paid $500 for ordinary repair
10. Purchased a patent for $45,000 cash
11. Paid $200,000 cash for addition to an existing building
12. Paid $60,000 for monthly salaries
13. Paid $250 for routine maintenance on equipment
14. Paid $10,000 for major repairs
15. Depreciation expense recorded for the year is $25,000
16. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions?
17. What amount did Jada report on the income statement for expenses for the year?
18. Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years.
19. Year 1: 50,000 tons
20. Year 2: 90,000 tons
21. Year 3: 100,000 tons
22. Year 4: 110,000 tons
23. Year 5: 130,000 tons
24. Calculate the depletion expense for the next five years, and create the journal entry for year one
Assignment 2 ACC220 Week 6
Exercises
Be sure to complete all steps and sections of the problem and show all your work.
1. Ronson recently purchased a new boat to help ship product overseas. The following information is related to that purchase:
2. purchase price $4,500,000
3. cost to bring boat to production facility $15,000
4. yearly insurance cost $12,000
5. pays annual maintenance cost of $22,000
6. received a 10% discount on sales price
7. Determine the acquisition cost of the boat and record the journal entry needed.
8. Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first year’s expense.