2024 - Brief Exercise 11 1 Fernandez Corporation Purchased A Truck At The Beginning Of 2014 For 50 000 The Truck Is

WEEK 5 FINAL EXAM – 2024

Brief Exercise 11-1

Fernandez Corporation purchased a truck at the beginning of 2014 for $50,000. The truck is estimated to have a salvage value of $2,000 and a useful life of 160,000 miles. It was driven 23,000 miles in 2014 and 31,000 miles in 2015.

Compute depreciation expense for 2014 and 2015.

Depreciation expense for 2014

Brief Exercise 12-1

Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2014, for $54,000. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years.

Prepare Celine Dion’s journal entries to record the purchase of the patent and 2014 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record purchase of patents)
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record amortization of patents)

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Brief Exercise 12-4

Gershwin Corporation obtained a franchise from Sonic Hedgehog Inc. for a cash payment of $120,000 on April 1, 2014. The franchise grants Gershwin the right to sell certain products and services for a period of 8 years.

Prepare Gershwin’s April 1 journal entry and December 31 adjusting entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
Dec. 31	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]

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Brief Exercise 13-1

Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts.

(a)		On July 1, (1) Roley purchased $60,000 of inventory, terms 2/10, n/30, FOB shipping point. (2) Roley paid freight costs of $1,200.
(b)		On July 3, Roley returned damaged goods and received credit of $6,000.
(c)		On July 10, Roley paid for the goods.

Prepare all necessary journal entries for Roley. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
(a) (1)	July 1	[removed]	[removed]	[removed]
		[removed]	[removed]	[removed]
(a) (2)		[removed]	[removed]	[removed]
		[removed]	[removed]	[removed]
(b)	July 3	[removed]	[removed]	[removed]
		[removed]	[removed]	[removed]
(c)	July 10	[removed]	[removed]	[removed]
		[removed]	[removed]	[removed]
		[removed]	[removed]	[removed]

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Brief Exercise 13-3

Takemoto Corporation borrowed $60,000 on November 1, 2014, by signing a $61,350, 3-month, zero-interest-bearing note. Prepare Takemoto’s November 1, 2014, entry; the December 31, 2014, annual adjusting entry; and the February 1, 2015, entry. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
11/1/14	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
12/31/14	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
2/1/15	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	(To record interest)
	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	(To pay note)

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Brief Exercise 14-1

Whiteside Corporation issues $500,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%.

Compute the issue price of the bonds. (Round answer to 0 decimal places, e.g. 38,548.)

Issue price of the bonds

[removed]

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Brief Exercise 21-12

On January 1, 2014, Irwin Animation sold a truck to Peete Finance for $33,000 and immediately leased it back. The truck was carried on Irwin’s books at $28,000. The term of the lease is 5 years, and title transfers to Irwin at lease-end. The lease requires 5 equal rental payments of $8,705 at the end of each year. The appropriate rate of interest is 10%, and the truck has a useful life of 5 years with no salvage value.

Prepare Irwin’s 2014 journal entries. To record amortization of profit on sale use Depreciation Expense account and not Sales Revenue account. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

Account Titles and Explanation	Debit	Credit
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record the sale.)
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record the leaseback.)
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record depreciation.)
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record amortization of profit on sale.)
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record first lease payment.)

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2024 – Brief Exercise 11 1 Fernandez Corporation purchased a truck at the beginning of 2014 for 50 000 The truck is

Brief Exercise 11-1

Brief Exercise 12-1

Brief Exercise 12-4

Brief Exercise 13-1

Brief Exercise 13-3

Brief Exercise 14-1

Brief Exercise 21-12

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Brief Exercise 11-1

Brief Exercise 12-1

Brief Exercise 12-4

Brief Exercise 13-1

Brief Exercise 13-3

Brief Exercise 14-1

Brief Exercise 21-12

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