Ch.

9:
Exercise E9-3
(a)

Dec.

31

Bad Debts Expense.............................................

Accounts ReceivableFell...........................

1,400

Dec.

31

Bad Debts Expense..............................................

[($840,000 $30,000) X 1%]
Allowance for Doubtful
Accounts................................................

8,100

Dec.

31

Bad Debts Expense.............................................

Allowance for Doubtful
Accounts....................................................

9,900

1,400
(b)

(1)

8,100
(2)

9,900
[($120,000 X 10%) $2,100]
(c)

(1)

Dec.

31

Bad Debts Expense.............................................

[($840,000 $30,000) X .75%]
Allowance for Doubtful
Accounts................................................

6,075

Dec.

31

Bad Debts Expense.............................................

Allowance for Doubtful
Accounts....................................................

7,400

6,075
(2)

7,400
[($120,000 X 6%) + $200]

Ch. 10:
Exercises E10-2
1.
2.
3.
4.

Factory Machinery
Truck
Factory Machinery
Land

5.
6.
7.
8.
9.

Prepaid Insurance
Land Improvements
Land Improvements
Land
Building

E10-7
(a)

(b)

(1)

2008: ($30,000 $2,000)/8 = $3,500

2009: ($30,000 $2,000)/8 = $3,500

(2)

($30,000 $2,000)/100,000 = $0.28 per mile

2008: 15,000 X $0.28 = $4,200
2009: 12,000 X $0.28 = $3,360

(3)

2008: $30,000 X 25% = $7,500

2009: ($30,000 $7,500) X 25% = $5,625

(1)

Depreciation Expense....................................................................
Accumulated DepreciationDelivery Truck............................
3,500

3,500

(2)
Delivery Truck...............................................................................
$30,000
Less: Accumulated Depreciation..................................................
(3,500)
$26,500
E10-9
Jan.

Accumulated DepreciationMachinery...........................
Machinery...................................................................

62,000

Depreciation Expense...........................................................
Accumulated Depreciation
Computer ($40,000 X 1/5 X 6/12)..........................

4,000

62,000
June

30

4,000

30

Cash ...........................................................................14,000
Accumulated DepreciationComputer.............................
($40,000 X 3/5 = $24,000; $24,000 + $4,000)
Gain on Disposal.........................................................

28,000

2,000
[$14,000 ($40,000 $28,000)]
Computer....................................................................
40,000
Dec.

31

Depreciation Expense...........................................................
Accumulated DepreciationTruck..........................

6,000

6,000
[($39,000 $3,000) X 1/6]
31

Loss on Disposal...................................................................
Accumulated DepreciationTruck....................................
[($39,000 $3,000) X 5/6]
Delivery Truck............................................................

9,000
30,000

39,000
E10-13
1/2/08

Patents.................................................................................
Cash...........................................................................
560,000

560,000

4/1/08

Goodwill..............................................................................
Cash...........................................................................
360,000
(Part of the entry to record
purchase of another company)

360,000

7/1/08

Franchise.............................................................................
Cash...........................................................................
440,000

440,000

9/1/08

Research and Development Expense................................

Cash...........................................................................
185,000

185,000

12/31/08

Amortization ExpensePatent.........................................
($560,000 7)
Amortization ExpenseFranchise....................................
[($440,000 10) X 1/2]
Patents..................................................................
80,000
Franchise..............................................................
22,000

80,000
22,000

Ending balances, 12/31/08:

Patent = $480,000 ($560,000 $80,000).
Goodwill = $360,000
Franchise = $418,000 ($440,000 $22,000).
R&D expense = $185,000
P10-5A
(a)

Apr.

Land ...................................................2,130,000
Cash..........................................................

2,130,000
May

Depreciation Expense.......................................
Accumulated Depreciation
Equipment...........................................

26,000

26,000
($780,000 X 1/10 X 4/12)
1

Cash ................................................... 450,000

Accumulated Depreciation
Equipment.....................................................
Equipment...............................................

780,000
Gain on Disposal.....................................
8,000
Cost $780,000
Accum. depreciation
equipment

338,000

338,000

[($780,000 X 1/10 X 4) +
$26,000]
Book value
Cash proceeds
Gain on disposal
June

442,000
450,000
$ 8,000

Cash ...................................................1,500,000
Land.........................................................

400,000
Gain on Disposal.....................................
1,100,000
July

Equipment.........................................................
Cash..........................................................

2,000,000

Depreciation Expense.......................................
Accumulated Depreciation
Equipment...........................................

50,000

2,000,000
Dec.

31

50,000
($500,000 X 1/10)
31

500,000

Accumulated Depreciation
Equipment.....................................................
Equipment...............................................

500,000

Cost $500,000
Accum. depreciation
equipment
($500,000 X 1/10 X 10)
Book value
(b)

Dec.

31

500,000
$

Depreciation Expense.......................................
Accumulated Depreciation
Buildings..............................................

570,000

570,000
($28,500,000 X 1/50)
31

Depreciation Expense.......................................
Accumulated Depreciation
Equipment...........................................

4,772,000

4,772,000
($46,720,000* X 1/10)
[($2,000,000 X 1/10) X 6/12]

$4,672,000
100,000
$4,772,000

*($48,000,000 $780,000 $500,000)

(c)

JIMENEZ COMPANY
Partial Balance Sheet
December 31, 2009

Plant Assets*
Land ........................................................................
Buildings.................................................................
Less: Accumulated depreciation
buildings...............................................
15,830,000
Equipment..............................................................
Less: Accumulated depreciation
equipment.............................................
39,710,000
Total plant assets..........................................
$61,270,000

$5,730,000
$28,500,000
12,670,000
48,720,000
9,010,000

*See T-accounts which follow.

Bal.
Apr. 1
Bal.

Land
4,000,000 June 1
2,130,000
5,730,000

Bal.
Bal.

Buildings
28,500,000
28,500,000

400,000

Accumulated DepreciationBuildings
Bal.
12,100,000
Dec. 31 adj.
570,000
Bal.
12,670,000

Bal.
July 1
Bal.

Equipment
48,000,000 May 1
2,000,000 Dec. 31
48,720,000

780,000
500,000

Accumulated DepreciationEquipment
May 1
338,000 Bal.
5,000,000
Dec. 31 500,000
May 1
26,000
Dec. 31
50,000
Dec. 31 adj.
4,772,000
Bal.
9,010,000