Acc 291 Week 3 Assignment 2014

Question 1 Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011. The truck has an expected salvage value  of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were  15,000 in 2011 and 12,000 in 2012. Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method,  and (3) the double-declining balance method.   (Round cost per mile to 2 decimal places, e.g. 10.50. Use rounded  amount for future calculations. Round final answers to 0 decimal places, e.g. 125.) Assume that Brainiac uses the straight-line method. (1) Prepare the journal entry to record 2011 depreciation. (2) Show  how the truck would be reported in the December 31, 2011, balance sheet.  (Enter all amounts as positive amounts  and subtract where necessary.)

Unformatted text preview: 98. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.) Date Account/Description Debit Credit July 1 Cash 2450000 Discount on bonds payable 50000 Bonds payable 2500000 Dec. 31 Bond interest expense 102500 Bond interest payable 100000 Discount on bonds payable 2500 Correct. Date Account/Description Debit Credit July 1 Cash ($2,500,000 98%) 2,450,000 Discount on bonds payable 50,000 Bonds payable 2,500,000 Dec. 31 Bond interest expense 102,500 Bonds interest payable ($2,500,000 8% 1/2) 100,000 Discount on bond payable ($50,000 20) 2,500 Show balance sheet presentation for each bond issue at December 31, 2011. (Enter all amounts as positive amounts and subtract where necessary.) Premium Long-term Liabilities Bonds payable, due 2021 $ 2,500,000 Add: Premium on bonds payable 95,000 $ 2,595,000 Discount Long-term Liabilities Bonds payable, due 2021 $ 2,500,000 Less: Discount on bonds payable 47,500 2,452,500...
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