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ACC Unit 5 Assignment Exercises - Lockard Company

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Question;Brief Exercise 11?2Lockard Company purchased machinery on January 1, 2012, for $151,840. The machinery is estimated to have a salvage value of $15,184 after a useful life of 8 years.(a) Compute 2012 depreciation expense using the straight?line method. (b) Compute 2012 depreciation expense using the straight?line method assuming the machinery was purchased on September 1, 2012.(a) Depreciation expense(b) Depreciation expenseBrief Exercise 11?4Lockard Company purchased machinery on January 1, 2012, for $153,360. The machinery is estimated to have a salvage value of $15,336 after a useful life of 8 years.(a) Compute 2012 depreciation expense using the double?declining?balance method. (b) Compute 2012 depreciation expense using the double?declining?balance method assuming the machinery was purchased on October 1, 2012. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 2,520.)(a)Depreciation expense(b)Depreciation expenseExercise 11?6Agazzi Company purchased equipment for $361,150 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $34,720. Estimated production is 40,300 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 560 hours and the equipment produces 1,000 units.Compute depreciation expense under each of the following methods. Agazzi is on a calendar?year basis ending December 31.(a) Straight?line method for 2012 (Round answer to 0 decimal places, e.g. $45,892.)(b) Activity method (units of output) for 2012 (Round rate per unit to 2 decimal places, e.g.$5.35 and final answer to 0 decimal places, e.g. $45,892.)(c) Activity method (working hours) for 2012 (Round rate per hour to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.)(d) Sum?of?the?years??digits method for 2014 (Round answer to 0 decimal places, e.g. $45,892.)(e) Double?declining?balance method for 2013 (Round answer to 0 decimal places, e.g. $45,892.)Exercise 11?11Machinery purchased for $119,080 by Carver Co. in 2008 was originally estimated to have a life of 8 years with a salvage value of $9,160 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2013, it is determined that the total estimated life should be 10 years with a salvage value of $10,305 at the end of that time. Assume straight?line depreciation.(a)Prepare the entry to correct the prior years? depreciation, if necessary.(b)Prepare the entry to record depreciation for 2013.(If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Machinery related account.)No. Account Titles and ExplanationDebitCreditBrief Exercise 12?5On September 1, 2012, Winans Corporation acquired Aumont Enterprises for a cash payment of $719,320. At the time of purchase, Aumont?s balance sheet showed assets of $600,910, liabilities of $208,500, and owners? equity of $392,410. The fair value of Aumont?s assets is estimated to be $829,110.Compute the amount of goodwill acquired by Winans.Value assigned to goodwill $Brief Exercise 12?6Kenoly Corporation owns a patent that has a carrying amount of $315,780. Kenoly expects future net cash flows from this patent to total $210,210. The fair value of the patent is $129,300.Prepare Kenoly?s journal entry, if necessary, to record the loss on impairment. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCreditBrief Exercise 12?9Capriati Corporation commenced operations in early 2012. The corporation incurred $63,880 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation.Prepare journal entries 1) to record the $63,880 expenditure and 2) 2012 amortization, if any. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)No. Account Titles and Explanation1.Debit2.CreditExercise 12?6Powerglide Company, organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012.1/2/12Purchased patent (8?year life)$415,6004/1/12 Goodwill (indefinite life) 7/1/12Purchased franchise with 10?year life, expiration date 7/1/22487,1008/1/12Payment of copyright (5?year life)188,0409/1/12Research and development costs247,500355,800$1,694,040(a) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCredit(b) Make the entry as of December 31, 2012, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCredit(c) Reflect all balances accurately as of December 31, 2012. (Use straight?line amortization.)Exercise 12?8Fontenot Corporation was organized in 2011 and began operations at the beginning of 2012. The company is involved in interior design consulting services. The following costs were incurred prior to the start of operations.Attorney?s fees in connection with organization of the company$16,170Purchase of drafting and design equipment12,370Costs of meetings of incorporators to discuss organizational activities6,290State filing fees to incorporate1,230$36,060(a) Compute the total amount of organization costs incurred by Fontenot.Total organization costs(b) Prepare the journal entry to record organization costs for 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCredit

 

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