ACCOUNTING QUESTION.
Hi, I would like to know answer and how to solove these
questions. These questions are in WILEY or GLEIM book, but I lost the
answer sheet. Please help.
Problem 1.
(1)Prepare the bank reconciliation of Moon Corporation as
of December 31, 19x5 using the following information .
(2)Give the necessary adjusting journal entries to correct
the Cash account
Balance per bank statement, December 31,19x5 $9,350
Ledger account balance as of December 31,19x5 $8,705
Outstanding checks ----#340, $600 and #357, $200
Deposit in transit, $400
Note collected by bank acting as Moon's agent -----principal, $500,
and interest, $30
Bank service charge, $29
NSF check deposited and turned $106
Check of Sum Company deducted in error $150
Problem 2.
Charles Company acquired equipment on January 2,199x,at a cash cost of
$1,400,000
Transportation charges amounted to $15,000, and installation and costs total
$40,000.
The equipment was estimated to have useful life of nine years and a salvage
value of $24,000 at the end of its life.
It was further estimated that the equipment would be used in the production
of 660,000 units of product during its life. During 199x, 220,000 units of
product were produced.
Prepare journal entries to record depreciation for the year ended December
31,199x, if the company used:
(a) The straight- line method.
(b) The units-of-production method
(c) The double-declining-balance method.
(d) The some- of- the -years'-digits method
Problem 3.
During 2002, Bobo Inc. began a projected to construct new corporate
headquarters. Bobo purchased land with an existing building for
$750,000. The land was valued at $700,000 and the building at
$50,000. Bobo planned to demolish the building and construct
a new office building on the site. ITEMS A through H represent
various expebditures by Bobo for this project.
REQUIRED:
For each expenditure in items A through H, select from the list
below the appropriate accounting treatment.
L. Classify as land and do not depreciate.
B. Classify as building and depreciate.
E. Expense.
ITEMS TO BE ANSWERED:
A. Purchase of land for $700,000.
B. Interest of $147,000 on construction financing
incurred after completion of construction.
C. Interest of $186,000 on construction financing
paid during construction.
D. Purchase of building for $50,000.
E. $18,500 payment of delinquent real estate taxes
assumed by Bobo on purchase.
F. $12,000 liability insurance premium during the
construcion paid.
G. $65,000 cost of razing existing building.
H. Moving costs of $136,000. |