NOTE: All answers must be in your own words. Quoted passages do not count as answers.
This contains 9 questions. Answer each question completely.
Show your work for partial credit. Using excel for caculations and answer presentations
is a key skill for our class. You could answer the essay questions on a word document.
Rose Fuel Company purchased land for $200,000.
Demolition of the existing building on the land totaled $60,000.
Rose Fuel sold salvage materials from the building site for $20,000.
A few months later Rose Fuel built a production building on the
land at a cost of $1,200,000 including site preparation costs of $80,000.
Rose Fuel also installed a fence for $10,000 and paved a parking lot for $30,000.
A. What amount should Rose Fuel record for the cost of the land?
B. What amount should Rose Fuel record for the cost of the building?
Cressy Construction Company purchased land for $4.2 million. Subsequent to the purchase date Cressy
paid $600,000 for land preparation as they were creating lots to sell for a new office park.
When recording the sale of each lot what value should be used for the cost? Round to the nearest Cent
NOTE: the streets were constructed previously and now owned by the city.
A. What amount should be recorded for cost of each A lot?
B. What amount should be recorded for cost of each B lot?
C. What amount should be recorded for cost of each C lot?
On 12/21/2021, Rose Brick Company purchased equipment, land, and building for
$300,000 as a lump sum purchase. Based on the information below
present the journal entry to record the sale (on the seller’s books) and the purchase by Rose.
Book Value Fair value
Equipment 50,000.00 25,000.00
Land 20,000.00 60,000.00
Building 120,000.00 180,000.00
A. Prepare the Journal Entry to record the purchase of the assets by Rose
B. Prepare the Journal Entry to record the sale of the assets by the seller
Bendix Corporation’s schedule of depreciable assets at December 31, Year 3,
is presented below. Bendix records a full year’s depreciation expense in the
year of an asset’s acquisition and no depreciation expense in the year of an asset’s disposition.
The estimated useful life of each depreciable asset is 5 years.
Balances below represent ledger amounts prior to recording depreciation for year 4.
Accumulated Acquisition Salvage Depreciable
Equipment Cost Depreciation Date Value Cost
A $120,000 $0 Year 1 $10,000 $110,000
B 60,000 0 Year 1 8,000 $52,000
C 50,000 0 Year 2 6,000 $44,000
$230,000 $0 $24,000
A. Complete the schedule of depreciation for Year 4 showing depreciation for each asset.
B. Prepare the journal to record depreciation for Year 4.
C. On January 1, Year 5 Bendix sold Asset A For $30,000. Record the JE for the sale
D. On January 2, Year 5 Bendix sold Asset B for $10,000. Record the JE for the sale.
VF Corporation’s schedule of depreciable assets at December 31, Year 3, is shown below
VF takes a full year’s depreciation expense in the year of an asset’s acquisition and no depreciation expense
in the year of an asset’s disposition. The estimated useful life of each depreciable asset is 5 years.
Accumulated Acquisition Salvage
Asset Cost Depreciation Date Value
A $100,000 64000 Year 2 $20,000
B 55,000 36,000 Year 1 10,000
C 70,000 33,600 Year 1 14,000
$225,000 $133,600 $44,000
VF depreciates asset C and A by the straight-line method. On June 30, Year 4, Vorst sold asset C
for $30,000 cash. On July 30, Year 4, VF throws Asset A away as it is no longer working and
no buyer could be located for the asset.
A. Present the journal entry for the sale of Asset C
B. Present the journal entry for the disposal of Asset A
C. How much would Asset A need to be sold for to break even, with no gain or loss?
Explain the value of various depreciation methods including double declining balance
and the sum of the years methods. You should have a total of 4 depreciation methods
in your answer including the two most popular methods. Explain why some methods
are preferred over others as you detail the 4 depreciation methods.
Remember to write in your own words. Quoted passages do not count as an answer.
Your company plans to sell unneeded assets to employees. Explain how to set the
price for the employees and the consequences for the company.
Your company purchased land, buildings, and land improvements for a bundled
price of $300,000. Based on your research you presented the information below.
Fair Market Assessed Value
Description Value from Tax Records
Building 300,000 200,000
Land 200,000 80,000
Total 500,000 280,000
1. Based on your analysis and documentation, write the journal entry to record
2. Include an explanation with the journal entry to document the values for the journal entry.
Explain how depreciation relates to the matching principle. Your answer should include the
words revenue and expense. Remember all answers in our class must be written in your
own words. Quoted passages do not count as answers.