Johnson, Incorporated had the following transactions during the year:
• Purchased a building for $5,000,000 using a mortgage for financing
• Paid $2,000 for ordinary repair on a piece of equipment
• Sold product on account to customers for $1,500,600
• Purchased a copyright for $5,000 cash
• Paid $20,000 cash to add a storage shed in the corner of an existing building
• Paid $360,000 in monthly salaries
• Paid $25,000 for routine maintenance on equipment
• Paid $110,000 for major repairs
If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?
Want to see the full answer?
Check out a sample textbook solutionChapter 11 Solutions
Principles of Accounting Volume 1
Additional Business Textbook Solutions
Principles of Management
Financial Accounting (12th Edition) (What's New in Accounting)
Managerial Accounting (5th Edition)
Principles of Accounting Volume 2
Construction Accounting And Financial Management (4th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
- Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?arrow_forwardAssume that in January 20X6, a Hotcake House restaurant purchased a building, paying $57,000 cash and signing a $108,000 note payable. The restaurant paid another $60,000 to remodel the bui and fixtures cost $54,000, and dishes and supplies-a current asset-were obtained for $10,200. Hotcake House is depreciating the building over 20 years by the straight-line method, with estimate value of $55,000 The fumiture and fixtures will be replaced at the end of five years and are being depreciated by the double-declining-balance method, with zero residual value. At the end of the first restaurant still has dishes and supplies worth $1,900. Requirement 1. Show what the restaurant will report for supplies, PPE, and cash flows at the end of the first year on its. • Income Statement • Balance Sheet • Statement of Cash Flows (investing only) Note The purchase of dishes and supplies is an operating cash flow because supplies are a current asset. Requirement 1. Show what the restaurant will report…arrow_forwardMiller Corp. purchased a new machine for its factory. The following lists shows the various expenditures for the machine during its first year: • Base purchase price, $75.000 • Sales tax incurred at the time of purchase, $4,000 • Installation charges for the machine, $700 • Insurance costs incurred while the machine was being shipped, $200 • Insurance costs for the first year of the machine's service life, $500 • Ordinary repairs and maintenance costs during the first year of the machine's service life, $1,200 Question: What should be the capitalized cost of the machine? Answer: $ (do not use commas or a decimal in the answer)arrow_forward
- Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it. Paid $550 for ordinary repair. Purchased a patent for $44,000 cash. Paid $180,000 cash for addition to an existing building. Paid $50,000 for monthly salaries. Paid $260 for routine maintenance on equipment. Paid $10,000 for major repairs. Depreciation expense recorded for the year is $25,000. A. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions? $fill in the blank 1 B. What amount did Jada report on the income statement for expenses for the year? $fill in the blank 2arrow_forwardJada Company had the following transactions during the year: Purchased a machine for $440,000 using a long-term note to finance it. Paid $460 for ordinary repair. Purchased a patent for $48,000 cash. Paid $160,000 cash for addition to an existing building. Paid $52,000 for monthly salaries. Paid $240 for routine maintenance on equipment. Paid $10,000 for major repairs. Depreciation expense recorded for the year is $20,000. A) If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions? B) What amount did Jada report on the income statement for expenses for the year?arrow_forwardJada Company had the following transactions during the year: Purchased a machine for $430,000 using a long-term note to finance it. Paid $520 for ordinary repair. Purchased a patent for $42,000 cash. Paid $200,000 cash for addition to an existing building. Paid $51,000 for monthly salaries. Paid $280 for routine maintenance on equipment. Paid $10,000 for major repairs. Depreciation expense recorded for the year is $30,000. A. If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jada’s balance sheet resulting from this year’s transactions? $fill in the blank 1 B. What amount did Jada report on the income statement for expenses for the year? $fill in the blank 2 Feedbackarrow_forward
- On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in cash and giving a short-term note for $304,000. Legal fees paid were $1,705, delinquent taxes assumed were $13,000, and fees paid to remove an old building from the land were $22,800. Materials salvaged from the demolition of the building were sold for $5,200. A contractor was paid $1,048,800 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.arrow_forwardJada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?arrow_forwardOn-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $42,000 in cash and giving a short-term note for $312,000. Legal fees paid were $1,410, delinquent taxes assumed were $10,300, and fees paid to remove an old building from the land were $20,400. Materials salvaged from the demolition of the building were sold for $5,300. A contractor was paid $1,076,200 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet. X $ Feedback ▼ Check My Work Costs incurred to ready the asset for use are added to the asset account. Materials salvaged and sold during the process reduce the cost of the land.arrow_forward
- Rossy Investigations purchased land, paying $97,000 cash plus a $250,000 note payable. In Addition, Rossy Investigations paid delinquent property tax of $2,000, title insurance costing $1,000, and $5,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $440,000. It also paid $56,000 for a fence around the property, $18,000 for a sign near the entrance, and $8,000 for special lighting on the grounds. Determine the cost of the land, land improvements, and building. Land Land Improvements Building Account Purchase price Note payable Property tax Title insurance Remove building Construct building Fence Sign Lighting Totals Submit All Partsarrow_forwardCharles Corp. purchased a new machine for its factory. The following lists shows the various expenditures for the machine during its first year: Base purchase price, $40,000 Sales tax incurred at the time of purchase, $3,000 Installation charges for the machine, $1,000 Insurance costs incurred while the machine was being shipped, $900 Insurance costs for the first year of the machine's service life, $500 Ordinary repairs and maintenance costs during the first year of the machine's service life, $1,200 Question: What should be the capitalized cost of the machine? Answer: $ Answerarrow_forwardFalcon Company acquired an adjacent lot to construct a new warehouse, paying $40,000 and giving a short-term note for $410,000. Legal fees paid were $13,275, delinquent taxes assessed were $14,500, and fees paid to remove an old building from the land were $15,800. Materials salvaged from the demolition of the building were sold for $6,800. A contractor was paid $890,000 to construct the new warehouse. Determine the cost of the land to be reported on the balance sheet.arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College