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Sunday, November 14, 2010

Valix Finacc vol 1 Problem 17-16

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 17 Problem 17-16



Retirement method

2008  Tools                                                                                           120,000            
                Cash                                                                                                             120,000                                                 
          Cash (300 x 50)                                                                            15,000                                
          Depreciation                                                                              45,000                       
                Tools (300 x 200)                                                                                            60,000                                               
2009  Tools                                                                                           360,000
                Cash                                                                                                           360,000

          Cash (700 x 70)                                                                            49,000
          Depreciation                                                                             111,000
                Tools                                                                                                            160,000



           500 x 200                                                                                                           100,000
           200 x 300                                                                                                             60,000
           Cost of tools retired                                                                                         160,000

Replacement method

2008  Tools (100 x 300)                                                                30,000                                 
          Depreciation (300 x 30)                                                    90,000                                        Cash                                                                                                                    120,000

          Cash                                                                                            15,000                                        Depreciation                                                                                                  15,000                                                           
2009  Tools (200 x 400)                                                                80,000
          Depreciation (700 x 400)                                                            280,000
                Cash                                                                                                            360,000

          Cash                                                                                            49,000
                 Depreciation                                                                                                49,000
Inventory method

2008  Tools                                                                                           120,000            
                Cash                                                                                                            120,000
          Cash                                                                                            15,000                                       Tools                                                                                                              15,000

          Depreciation (265,000 – 200,000)                                                 65,000                            
                Tools                                                                                                              65,000

2009  Tools                                                                                           360,000
               Cash                                                                                                             360,000

          Cash                                                                                            49,000
                Tools                                                                                                              49,000

          Depreciation (511,000 - 350,000)                                                161,000
                Tools                                                                                                            161,000

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