Answer BE9-2

$26,780
Explanation:

The cost of the truck will include

= Cash price + Sales taxes + Painting and lettering
= $24,000 + $1,080 + $1,700
= $26,780
Note:
Accident Insurance and Motor Vehicle license are not included in the cost of the truck as they
are revenue expenses.

Answer E9-3

Answer and Explanation:

Cost of land should be its purchase price and any costs directly related to its purchase. It
could also include expenditures made that increase the economic value of land and not just
merely maintain its condition.
So, cost of land includes:
Purchase price = $80,000
Demolition cost, net of income from salvage value ($8,200 - $1,700) = $6,500
Attorney's fee = $1,900
Real estate broker's fee = $5,200
Driveway and parking lot 14,000
Total Cost of Land = $107,600
b. It will be recorded as follows:
Dr Building 9,100
Cr Cash 9,100
(Record architecture fee)

Answer E9-5
(90,000 - 8,000)/8 = 10,250
2017 Depreciation = 10,250 * 3/12 = 2,562.5
2018 depreciation = 10,250
Answer E9-8
Calculation of book value and accumulated depreciation for
         
each of the assets
No
Depreciati of Accumulate Book
Date of Purchas Usefu Salvag Depreciation Sale
on per year d Value Profit/
Item purchas e price l Life e Value base ( E) = Amoun
year (F) = s depreciation (I)=(B (Los
e (A) (B) ( C) (D) (B-D) t (J)
(E/C) used (H) = (F*G) -H)
(G)

Machiner Jan-01-
62000 10 0 62000 6200 10 62000 0 0 0
y 2007

Computer Jan-01- 36000 3 0 36000 12000 2.5 30000 6000 5000 (1000)
 2015

Jan-01-
Truck 25000 5 4000 21000 4200 4 16800 8200 9000 800
2014

1-1-2017
Dr Accumulated Depreciation – Machinery 62,000
Cr Machinery 62,000
June 30
Dr Depreciation 6,000
Cr Accumulated Depreciation – Computer 6,000
Dr Cash 5,000
Dr Loss on sale of computer 1,000
Dr Accumulated Depreciation – Computer 30,000
Cr Computer 36,000
31 Dec
Dr Depreciation 4,200
Cr Accumulated Depreciation – Truck 4,200
Dr Cash 9,000
Dr Accumulated Depreciation – Truck 16,800
Cr Truck 25,000
Gain on sale of Truck 800

Answer E9-11

Answer and Explanation:

The Journal entry is shown below:

1.

Dr Amortization expense – copyrights $20,000 ($120,000 ÷ 6)

Cr copyrights $20,000

(Being amortization expense is recorded)

2.

Dr Amortization expense – Patents $11,250 ($54,000 ÷ 4) × 10 ÷ 12

Cr Patents $11,250

(Being amortization expense is recorded)

3. No Journal entry is required as IFRS good will is no longer granted to be amortized.