Accounting Exercises: Plant, Natural Resources, and Intangible Assets

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Essay #: 071884
Total text length is 4,858 characters (approximately 3.4 pages).

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The beginning:
Accounting Exercises: Plant, Natural Resources, and Intangible Assets
MACROBUTTON DoFieldClick [Student’s Name]
MACROBUTTON DoFieldClick [Instructor’s Name]
MACROBUTTON DoFieldClick [Course Title]
29 October 2011
Chapter 9 Exercises
This paper answers three accounting exercises relating to the area of plant assets, natural resources, and intangible assets.
Exercise E9-1. Eight expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011.
a) According to the cost principle, the acquisition cost of plant assets is the total of all expenditures that are needed in order to acquire the asset and make it suitable for its intended use (p. 399).
b) Following are the transactions for exercise E9-1 and the...
The end:
.....annual depreciation on delivery truck)
3,500
3,500
Brainiac
Company
Dec 31, 2011 Balance Sheet (partial)
Delivery truck
$30,000
Less: Accumulated depreciation
3,500
$26,500
Exercise E9-12. Preparing adjusting entries for Franco Corporation.
Goodwill is not amortized (p. 417), so there is no adjusting entry required. As for Franco’s patent, it is amortized on a straight-line basis over the shorter of its useful life and its legal life (pp. 414-415). Its annual amortization is therefore $90,000 divided by 5 years, resulting in $18,000. Further, since it was purchased mid-year, its annual amortization for the first year must be prorated ($18,000 x 8/12 = $12,000).
Dec. 31
Amortization ExpensePatent (To record patent amortization)
12,000
12,000