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    ACCT 1107 - Assignment #4

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    hkarim8641
    The document allocates the purchase price and expenses of three machines among them based on their appraised values. It then calculates the annual depreciation for each machine using different methods. The second document records several business transactions for a company throughout the year. Adjusting entries are made at year-end for interest expense, wages expense, income tax expense, and reclassification of long-term debt. A statement of financial position is presented showing the company's current liabilities as of December 31, 2021. The quick ratio is analyzed for changes throughout the periods presented.

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    ACCT 1107 - Assignment #4

    Uploaded by

    hkarim8641
    5 views3 pages
    The document allocates the purchase price and expenses of three machines among them based on their appraised values. It then calculates the annual depreciation for each machine using different methods. The second document records several business transactions for a company throughout the year. Adjusting entries are made at year-end for interest expense, wages expense, income tax expense, and reclassification of long-term debt. A statement of financial position is presented showing the company's current liabilities as of December 31, 2021. The quick ratio is analyzed for changes throughout the periods presented.

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    ACCT 1107- Assignment #4

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    The document allocates the purchase price and expenses of three machines among them based on their appraised values. It then calculates the annual depreciation for each machine using different methods. The second document records several business transactions for a company throughout the year. Adjusting entries are made at year-end for interest expense, wages expense, income tax expense, and reclassification of long-term debt. A statement of financial position is presented showing the company's current liabilities as of December 31, 2021. The quick ratio is analyzed for changes throughout the periods presented.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    5 views3 pages

    ACCT 1107 - Assignment #4

    Uploaded by

    hkarim8641
    The document allocates the purchase price and expenses of three machines among them based on their appraised values. It then calculates the annual depreciation for each machine using different methods. The second document records several business transactions for a company throughout the year. Adjusting entries are made at year-end for interest expense, wages expense, income tax expense, and reclassification of long-term debt. A statement of financial position is presented showing the company's current liabilities as of December 31, 2021. The quick ratio is analyzed for changes throughout the periods presented.

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    of 3

    P8-4

    1 Allocation of the purchase price and shipping expenses


    Appraisal Value
    Machine Amount Ratio
    A $9,500 0.19
    B $32,000 0.64
    C $8,500 0.17
    Total $50,000 1

    When we are allocating, appraised values are used because they show a better
    indication of market value of each machine.

    Each Machine's cost:


    MachineA Machine B Machine C
    Distributed Purchase 7600 $25,600 6800
    Including transportation cost

    Installation Cost 300 500 200


    Renovation Cost 2000 400 600
    9900 26500 7600

    2 Annual Depreciation of each Machine:

    Machine Depreciation Method Calculation


    A Straight Line ($9,900 - $1500)*1/5 years = $1,680
    B Units od production ($26,500 - $900)/40,000 hours= 0.64
    0.64*8,000 hours = 5120
    C Dpuble declining balance ($7600*1/4 years)*2 = 3800

    Adjusting Entry
    Depreciation Expense 10600
    Machine A accumulated Depreciation 1680
    Machine B accumulated Depreciation 5120
    Machine C accumulated Depreciation 3800

    P9-1
    1 02-Jan
    Accrued interest payable 52000
    Cash 52000

    30-Apr
    Cash 550000
    Notes Payable 550000
    20-May
    Cash 6840
    Sales revenue 6000
    HST payable 840

    03-Jun
    Inventory 75800
    Trades payable 75800

    05-Jul
    Trades Payable 75800
    Cash 75800

    31-Aug
    Cash 6840
    Revenue 4000
    Deferred Revenue 2000
    Hst Payable 840

    2 Adjusting Entries
    31-Dec-21

    Long-term Liabilities 100000


    Current Liabilities 100000

    Interest Expense 22000


    Accrued interest payable 22000

    Wages Expense 85000


    Wages Payable 85000

    Income tax expense 125000


    Income tax payable 93000
    Deffered income taxes 32000

    3 Dumax Company
    Statement of Financial Position
    Ending Decemeber 31, 2021

    Current liabilities
    Wages Payable 85000
    Income tax payable 93000
    Deffred income tax payable 32000
    HST payable 840
    Accrued interest payable 22000
    Deffered Revenue 2000
    Notes payable 550000
    Current long-term Debt 100000

    Total Current-Liabilities 884840

    4 Quick Ratio changes

    02-Jan Decreased
    30-Apr Increased
    30-May Increased
    03-Jun Increased
    05-Jul Decreased
    31-Aug Increased
    Adjusted (Dec 31, 2021) Decreased
    Interest (Dec 31, 2021) Decreased
    Wages (Dec 31, 2021) Decreased
    Income tax (Dec 31, 2021) Decreased

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