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On 1 January 2000, Fabrisio Ltd purchased two new trucks at a total cost of $250,000. It wasestimated that the...

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On 1 January 2000, Fabrisio Ltd purchased two new trucks at a total cost of $250,000. It was;estimated that the trucks would have a useful life of 7 years & a residual value of $20,000 each.;Fabrisio Ltd. uses straight line method of depreciation for all of its equipment. The company?s;balance date is 31 December.;Required;a. Record the purchase of the trucks on January 1, 2000.;b. Record the depreciation expense on trucks for 2005.;c. Assume that early in 2006, the company revalued the trucks upwards by $25,000 each;assessed that the trucks would last 4 more years instead of 1 but that they would still have;the same residual value. Record all journal entries for the trucks in 2006.;d. Make the necessary entries to record the sale of one of the trucks on 31 December 2006.;The truck was sold for $27,000. (Assume that the two trucks had the same carrying amount.);e. How much depreciation expense would be recorded on the second truck during 2009 if it;were still being used & if its estimated residual value were still $20,000? Why?;Q.2;The following transactions of Gohart Ltd. occurred during the financial year 1 July 2013 to 30 June;2014;July 11 The company accepted an 8%, 90 day promissory note in exchange for the overdue;account receivable of Jones J for $8,000;Aug 1 Wrote off the $820 account receivable of K Hobbits as bad debt.;Sept 9 The note receivable from Jones J was discounted at the bank at a discount rate of 10%;the net proceeds banked.;Oct 9 Jones J defaulted on his note & the bank assessed a protest fee of $10. Gohart Ltd.?s;account was debited for the maturity value of the note plus the $10 protest fee.;Nov 8 Jones J unexpectedly paid the maturity value of his dishonoured note plus the protest;fee & the interest at 10% on both for the 30 days beyond the note?s maturity date.;Dec 3 Gohart Ltd. received $500 cash & a 60-day, 10% bill of exchange acceptance from P;Pullman in granting an extension on his overdue account receivables of $9,000.;Dec 28 Amexcard sales of $6,600. Credit charge of 5% was applicable;Jan 31 Received payment from P Pullman on his bill of 3 December.;May 2 The company accepted a 90-day, 11% bill from S Solomon in settlement of an account;receivable of $7,000.;June 10 Sale on International Express credit card of $750 (credit charge 5.5%);June 30 Interest was recorded on the bill receivable from S Solomon.;Bad debt expense is recorded at 1% of net credit sales of $328,000 using the allowance;method of accounting for bad debts.;Required;Prepare general journal entries to record the transactions in Gohart Ltd.?s records.

 

Paper#78434 | Written in 18-Jul-2015

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