8,400 Fixed Assets and Intangible Assets

440

Chapter 9 Fixed Assets and Intangible Assets

EX 9-17 Entries for sale of fixed asset OBJ. 3 Equipment acquired on January 8, 2011, at a cost of 420,000, has an estimated useful life of 15 years, has an estimated residual value of 30,000, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31, 2014, the end of the year? b. Assuming that the equipment was sold on October 1, 2015, for 275,000, journalize the entries to record 1 depreciation for the nine months until the sale date, and 2 the sale of the equipment. EX 9-18 Disposal of fixed asset OBJ. 3 Equipment acquired on January 6, 2011, at a cost of 714,000, has an estimated useful life of 12 years and an estimated residual value of 44,400. a. What was the annual amount of depreciation for the years 2011, 2012, and 2013, using the straight-line method of depreciation? b. What was the book value of the equipment on January 1, 2014? c. Assuming that the equipment was sold on January 3, 2014, for 525,000, journalize the entry to record the sale. d. Assuming that the equipment had been sold on January 3, 2014, for 560,000 instead of 525,000, journalize the entry to record the sale. EX 9-19 Depletion entries OBJ. 4 Crazy Jim’s Mining Co. acquired mineral rights for 21,750,000. The mineral deposit is estimated at 15,000,000 tons. During the current year, 3,600,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. b. Journalize the adjusting entry to recognize the depletion expense. EX 9-20 Amortization entries OBJ. 5 Voss Company acquired patent rights on January 6, 2011, for 480,000. The patent has a useful life equal to its legal life of eight years. On January 3, 2014, Voss successfully defended the patent in a lawsuit at a cost of 80,000. a. Determine the patent amortization expense for the current year ended December 31, 2014. b. Journalize the adjusting entry to recognize the amortization. EX 9-21 Book value of fixed assets OBJ. 6 Apple Inc. designs, manufactures, and markets personal computers and related software. Apple also manufactures and distributes music players iPod and mobile phones iPhone along with related accessories and services, including online distribution of third-party music, videos, and applications. The following information was taken from a recent annual report of Apple: Property, Plant, and Equipment in millions: Current Year Preceding Year Land and buildings 1,471 955 Machinery, equipment, and internal-use software 3,589 1,932 Oice furniture and equipment 144 115 Other ixed assets related to leases 2,030 1,665 Accumulated depreciation and amortization 2,466 1,713

b. 546,600

a. 5,220,000

a. 76,000

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