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Nov 28, 2011, 07:43 PM
1. At December 31, 2010, Jimenez Company reported the following as plant assets.
Land $3,717,000
Buildings $29,234,000
Less: Accumulated depreciation-buildings 13,237,000
15,997,000
Equipment 48,945,000
Less: Accumulated depreciation-equipment 4,528,000
44,417,000
Total plant assets $64,131,000
During 2011, the following selected cash transactions occurred.
April 1 Purchased land for $2,285,000.
May 1 Sold equipment that cost $615,000 when purchased on January 1, 2007. The equipment was sold for $355,500.
June 1 Sold land purchased on June 1, 2001, for $1,691,000. The land cost $403,000.
July 1 Purchased equipment for $2,170,000.
Dec. 31 Retired equipment that cost $507,000 when purchased on December 31, 2001. No salvage value was received.
Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2. Round answers to 0 decimal places, e.g. 125.)
Date Account/Description Debit Credit
Apr. 1 Gain on disposalLandCashAcc. Depreciation-EquipmentEquipmentAcc. Depreciation-BuildingsDepreciation expenseBuildingsLoss on disposal
BuildingsLoss on disposalAcc. Depreciation-EquipmentLandCashGain on disposalEquipmentDepreciation expenseAcc. Depreciation-Buildings
May 1 BuildingsDepreciation expenseAcc. Depreciation-EquipmentLandCashEquipmentAcc. Depreciation-BuildingsGain on disposalLoss on disposal
BuildingsAcc. Depreciation-EquipmentLandCashDepreciation expenseEquipmentGain on disposalLoss on disposalAcc. Depreciation-Buildings
(To record depreciation.)
May 1 Depreciation expenseAcc. Depreciation-EquipmentGain on disposalBuildingsAcc. Depreciation-BuildingsLoss on disposalCashEquipmentLand
Depreciation expenseAcc. Depreciation-BuildingsCashLoss on disposalEquipmentLandBuildingsAcc. Depreciation-EquipmentGain on disposal
Acc. Depreciation-EquipmentDepreciation expenseGain on disposalEquipmentAcc. Depreciation-BuildingsLandLoss on disposalBuildingsCash
Depreciation expenseAcc. Depreciation-EquipmentLandLoss on disposalBuildingsEquipmentAcc. Depreciation-BuildingsGain on disposalCash
(To record sale of equipment.)
June 1 Gain on disposalEquipmentDepreciation expenseAcc. Depreciation-EquipmentAcc. Depreciation-BuildingsCashLoss on disposalBuildingsLand
CashEquipmentDepreciation expenseGain on disposalLandAcc. Depreciation-EquipmentLoss on disposalAcc. Depreciation-BuildingsBuildings
Loss on disposalDepreciation expenseBuildingsLandAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentGain on disposalEquipmentCash
July 1 Gain on disposalCashAcc. Depreciation-BuildingsBuildingsLoss on disposalDepreciation expenseEquipmentLandAcc. Depreciation-Equipment
Depreciation expenseGain on disposalAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentLoss on disposalBuildingsCashEquipmentLand
Dec. 31 BuildingsLoss on disposalAcc. Depreciation-EquipmentGain on disposalLandCashEquipmentAcc. Depreciation-BuildingsDepreciation expense
Gain on disposalAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentDepreciation expenseLandCashEquipmentLoss on disposalBuildings
(To record depreciation.)
Dec. 31 Acc. Depreciation-BuildingsDepreciation expenseAcc. Depreciation-EquipmentEquipmentLoss on disposalCashGain on disposalBuildingsLand
EquipmentGain on disposalAcc. Depreciation-BuildingsLandAcc. Depreciation-EquipmentBuildingsCashDepreciation expenseLoss on disposal
(To record retirement of equipment.)
Record adjusting entries for depreciation for 2011.
Date Account/Description Debit Credit
Dec. 31 Acc. Depreciation-BuildingsLandDepreciation expenseCashGain on disposalEquipmentLoss on disposalAcc. Depreciation-EquipmentBuildings
Gain on disposalEquipmentLoss on disposalLandBuildingsAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentCashDepreciation expense
(To record building depreciation.)
Dec. 31 Depreciation expenseEquipmentAcc. Depreciation-BuildingsBuildingsGain on disposalAcc. Depreciation-EquipmentLoss on disposalLandCash
EquipmentCashBuildingsDepreciation expenseLandLoss on disposalAcc. Depreciation-EquipmentGain on disposalAcc. Depreciation-Buildings
(To record equipment depreciation.)
Complete the plant assets section of Jimenez's balance sheet at December 31, 2011. (List in the same order as the partial balance sheet presented in the problem.)
JIMENEZ COMPANY
Balance Sheet (Partial)
December 31, 2011
Plant Assets
EquipmentDepreciation expenseLandCashGain on disposalAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentLoss on disposalBuildings $
Gain on disposalLoss on disposalBuildingsLandAcc. Depreciation-EquipmentDepreciation expenseAcc. Depreciation-BuildingsCashEquipment $
Less: EquipmentAcc. Depreciation-EquipmentLoss on disposalDepreciation expenseCashGain on disposalAcc. Depreciation-BuildingsLandBuildings
BuildingsCashAcc. Depreciation-EquipmentGain on disposalEquipmentLandLoss on disposalAcc. Depreciation-BuildingsDepreciation expense
Less: EquipmentLandLoss on disposalDepreciation expenseCashAcc. Depreciation-EquipmentGain on disposalBuildingsAcc. Depreciation-Buildings
Total plant assets $
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Copyright © 2000-2011 by John Wiley & Sons, Inc. or related companies. All rights reserved.
2. Presented below is an aging schedule for Zillmann Company.
Number of Days Past Due
Customer
Total
Not
Yet Due
1-30
31-60
61-90
Over 90
Arndt $24,630 $11,800 $12,830
Blair 42,890 $42,890
Chase 61,520 19,400 6,650 $35,470
Drea 34,150 $34,150
Others 140,120
96,940
19,290
15,910
7,980
$303,310
$159,230
$37,740
$28,740
$35,470
$42,130
Estimated percentage
uncollectible 4%
9%
14%
26%
60%
Total estimated
bad debts $48,290
$6,369
$3,397
$4,024
$9,222
$25,278
At December 31, 2010, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $13,680.
Journalize the adjusting entry for bad debts at December 31, 2010.
Date Description/Account Debit Credit
Dec. 31
Post the adjusting entry for bad debts at December 31, 2010. Journalize and post to the allowance account the following events and transactions in the year 2011. (If answer is zero, please enter 0. Do not leave any fields blank.)
On March 31, a $1,350 customer balance originating in 2010 is judged uncollectible.
On May 31, a check for $1,350 is received from the customer whose account was written off as uncollectible on March 31.
Date Description Debit Credit
3/31/11
5/31/11
5/31/11
Accounts receivable
Bad Debts Expense
Date
Explanation
Ref.
Debit
Credit
Balance
2010
Dec. 31 Adjusting
Allowance for Doubtful Accounts
Date
Explanation
Ref.
Debit
Credit
Balance
2010
Dec. 31 Balance
31 Adjusting
2011
Mar. 31
May 31
Journalize the adjusting entry for bad debts on December 31, 2011, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $870 and the aging schedule indicates that total estimated bad debts will be $31,600.
Date Description Debit Credit
12/31/11
Land $3,717,000
Buildings $29,234,000
Less: Accumulated depreciation-buildings 13,237,000
15,997,000
Equipment 48,945,000
Less: Accumulated depreciation-equipment 4,528,000
44,417,000
Total plant assets $64,131,000
During 2011, the following selected cash transactions occurred.
April 1 Purchased land for $2,285,000.
May 1 Sold equipment that cost $615,000 when purchased on January 1, 2007. The equipment was sold for $355,500.
June 1 Sold land purchased on June 1, 2001, for $1,691,000. The land cost $403,000.
July 1 Purchased equipment for $2,170,000.
Dec. 31 Retired equipment that cost $507,000 when purchased on December 31, 2001. No salvage value was received.
Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2. Round answers to 0 decimal places, e.g. 125.)
Date Account/Description Debit Credit
Apr. 1 Gain on disposalLandCashAcc. Depreciation-EquipmentEquipmentAcc. Depreciation-BuildingsDepreciation expenseBuildingsLoss on disposal
BuildingsLoss on disposalAcc. Depreciation-EquipmentLandCashGain on disposalEquipmentDepreciation expenseAcc. Depreciation-Buildings
May 1 BuildingsDepreciation expenseAcc. Depreciation-EquipmentLandCashEquipmentAcc. Depreciation-BuildingsGain on disposalLoss on disposal
BuildingsAcc. Depreciation-EquipmentLandCashDepreciation expenseEquipmentGain on disposalLoss on disposalAcc. Depreciation-Buildings
(To record depreciation.)
May 1 Depreciation expenseAcc. Depreciation-EquipmentGain on disposalBuildingsAcc. Depreciation-BuildingsLoss on disposalCashEquipmentLand
Depreciation expenseAcc. Depreciation-BuildingsCashLoss on disposalEquipmentLandBuildingsAcc. Depreciation-EquipmentGain on disposal
Acc. Depreciation-EquipmentDepreciation expenseGain on disposalEquipmentAcc. Depreciation-BuildingsLandLoss on disposalBuildingsCash
Depreciation expenseAcc. Depreciation-EquipmentLandLoss on disposalBuildingsEquipmentAcc. Depreciation-BuildingsGain on disposalCash
(To record sale of equipment.)
June 1 Gain on disposalEquipmentDepreciation expenseAcc. Depreciation-EquipmentAcc. Depreciation-BuildingsCashLoss on disposalBuildingsLand
CashEquipmentDepreciation expenseGain on disposalLandAcc. Depreciation-EquipmentLoss on disposalAcc. Depreciation-BuildingsBuildings
Loss on disposalDepreciation expenseBuildingsLandAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentGain on disposalEquipmentCash
July 1 Gain on disposalCashAcc. Depreciation-BuildingsBuildingsLoss on disposalDepreciation expenseEquipmentLandAcc. Depreciation-Equipment
Depreciation expenseGain on disposalAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentLoss on disposalBuildingsCashEquipmentLand
Dec. 31 BuildingsLoss on disposalAcc. Depreciation-EquipmentGain on disposalLandCashEquipmentAcc. Depreciation-BuildingsDepreciation expense
Gain on disposalAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentDepreciation expenseLandCashEquipmentLoss on disposalBuildings
(To record depreciation.)
Dec. 31 Acc. Depreciation-BuildingsDepreciation expenseAcc. Depreciation-EquipmentEquipmentLoss on disposalCashGain on disposalBuildingsLand
EquipmentGain on disposalAcc. Depreciation-BuildingsLandAcc. Depreciation-EquipmentBuildingsCashDepreciation expenseLoss on disposal
(To record retirement of equipment.)
Record adjusting entries for depreciation for 2011.
Date Account/Description Debit Credit
Dec. 31 Acc. Depreciation-BuildingsLandDepreciation expenseCashGain on disposalEquipmentLoss on disposalAcc. Depreciation-EquipmentBuildings
Gain on disposalEquipmentLoss on disposalLandBuildingsAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentCashDepreciation expense
(To record building depreciation.)
Dec. 31 Depreciation expenseEquipmentAcc. Depreciation-BuildingsBuildingsGain on disposalAcc. Depreciation-EquipmentLoss on disposalLandCash
EquipmentCashBuildingsDepreciation expenseLandLoss on disposalAcc. Depreciation-EquipmentGain on disposalAcc. Depreciation-Buildings
(To record equipment depreciation.)
Complete the plant assets section of Jimenez's balance sheet at December 31, 2011. (List in the same order as the partial balance sheet presented in the problem.)
JIMENEZ COMPANY
Balance Sheet (Partial)
December 31, 2011
Plant Assets
EquipmentDepreciation expenseLandCashGain on disposalAcc. Depreciation-BuildingsAcc. Depreciation-EquipmentLoss on disposalBuildings $
Gain on disposalLoss on disposalBuildingsLandAcc. Depreciation-EquipmentDepreciation expenseAcc. Depreciation-BuildingsCashEquipment $
Less: EquipmentAcc. Depreciation-EquipmentLoss on disposalDepreciation expenseCashGain on disposalAcc. Depreciation-BuildingsLandBuildings
BuildingsCashAcc. Depreciation-EquipmentGain on disposalEquipmentLandLoss on disposalAcc. Depreciation-BuildingsDepreciation expense
Less: EquipmentLandLoss on disposalDepreciation expenseCashAcc. Depreciation-EquipmentGain on disposalBuildingsAcc. Depreciation-Buildings
Total plant assets $
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Copyright © 2000-2011 by John Wiley & Sons, Inc. or related companies. All rights reserved.
2. Presented below is an aging schedule for Zillmann Company.
Number of Days Past Due
Customer
Total
Not
Yet Due
1-30
31-60
61-90
Over 90
Arndt $24,630 $11,800 $12,830
Blair 42,890 $42,890
Chase 61,520 19,400 6,650 $35,470
Drea 34,150 $34,150
Others 140,120
96,940
19,290
15,910
7,980
$303,310
$159,230
$37,740
$28,740
$35,470
$42,130
Estimated percentage
uncollectible 4%
9%
14%
26%
60%
Total estimated
bad debts $48,290
$6,369
$3,397
$4,024
$9,222
$25,278
At December 31, 2010, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $13,680.
Journalize the adjusting entry for bad debts at December 31, 2010.
Date Description/Account Debit Credit
Dec. 31
Post the adjusting entry for bad debts at December 31, 2010. Journalize and post to the allowance account the following events and transactions in the year 2011. (If answer is zero, please enter 0. Do not leave any fields blank.)
On March 31, a $1,350 customer balance originating in 2010 is judged uncollectible.
On May 31, a check for $1,350 is received from the customer whose account was written off as uncollectible on March 31.
Date Description Debit Credit
3/31/11
5/31/11
5/31/11
Accounts receivable
Bad Debts Expense
Date
Explanation
Ref.
Debit
Credit
Balance
2010
Dec. 31 Adjusting
Allowance for Doubtful Accounts
Date
Explanation
Ref.
Debit
Credit
Balance
2010
Dec. 31 Balance
31 Adjusting
2011
Mar. 31
May 31
Journalize the adjusting entry for bad debts on December 31, 2011, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $870 and the aging schedule indicates that total estimated bad debts will be $31,600.
Date Description Debit Credit
12/31/11