414 CHAPTER 9 Pant Assots and Depreciation EXERCISE 9.6 t-line depreciation on all its depreciable assets sted and closed atthe The sccouny cad of each calendar year. On January 4, 1999, the y corporation e Inachinery for cash at a cost of $80,000, is useful life wos estimated 1 be 10 yeas wih STA tal value of $12,000, Depreciation for paral years is recorded tothe nearest full moth {n 2001, after almost 3 years of experience wit timated life of the equipment should be tevised from 10. in the estimate of residual value, The revised estimate of useful life was decided on prion ing depreciation ‘or the period ended December 31, 2001 4. Prepare journal entries in chronological order fr the above evens, beioning wih of the machinery on January 4, 1999, Show separately the depreciation for 19 2001 What factors may have caused the company to revise its estimate of the « life? led in on a similar new one, pete Ct ss 300 a ao OO eg ee toned deoeeea ‘amounted to $48,000. The new crane cost trade-in allowance of $15,000. omen 1 en ” accepted accounting Principles. ee an ‘c. Compute the cost basis of the new ne ad ” i in allowance was d. Assume that the trade- anil ‘Accounting for Trade-ins Fro nid or trade it in for the Ste| B to this 30-year H B31, 2001, balance sheet of Kan ef jditional dollar amounts, wn 2000, Kay Architectural Se ember 31, 2000, Kay Services purchased e ooo cash and ssing. a twoear instinct ne ph neo EIS, PROLEN 18 : te payable for $15,215 installments of $4,800, which include eat iP ude interes computed at he anna wrest dollar Als nay . Erp, tr you ned ne Mortgage be sas Steak bs e call for meetaton Table and enn : fo per semiannual period). Payments are due on june 36 a ss < t ‘any interest payment date by paying the unpaid balance plus , amortization table showing the allocation of each ofthe for semiannual payments stions in the principal amount of the note. “qual entries to record the issuance ofthis note and each of the four semiannual pay- ayy to-pay the entire unpei balance of this note. ; 2h rot this note, (Assume tat the semin-PROBLEM 11.4 Stockholders’ Equity: A Short Comprehensive Problem PROBLEM 11.5 Analysis of an Equity Section ~ of a Balance Sheet 1 wk cee a HAPTER 11 stockholders Eauity: Paitin capt Early im the year Rog Munications, Inc, Ty Cumulative preferre transactions (amon; Jan. 6 Gordon and several frend ae Cr several friends organized a corporation 1 COrPoration was authorized to issue 50,000 shares of Sines “stock and 400,000 shares of $2 par value common stock Te 8 others) occured during the year: Issued for cash 20,000 shares of comme Sued to Gordon and 10 other investors ese an additonal $00 shares of common sock o Gordon in xchange vies in organizing the corporation, The stockholder red that the aa ‘worth $7,000, Jan, 12 Issued 2,500 shares of preferred stock fr esh of $250,000, Jone 4 Acquired and «bull sit in exchange fo 100 sso oman view ofthe aprased value of the land and the progress of the company ne ‘greed that the common stock was to be value for purposes of tis wana per share : fe Now. 15 1 it an of S10 pr he ws deo ee a paid December 20, ae Dec. 20 Paid the cash dividend declared on November 15. Dec. 31 After the revenue and expenses were closed into the Income account indicated a net income of $106,500. on stock at $4 per Sha. The yl Jan. 7 Instructions 7 ibe ‘a. Prepare journal entries in general journal form to record tries at December 31 to close the Income Summary