Problem 1 (ch 8)On January 1, 20X3, Perkins Printing Corporation purchased a digital press for $1,450,000. It cost an additional $50,000 to deliver, install, and calibrate the press. This machine has a service life of 5 years, at which time it is expected that the device will be scrapped for a $100,000 salvage value.Perkins uses the straight-line depreciation method.`(a)Prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year.(b)Show how the asset and related accumulated depreciation would appear on a balance sheet at December 31, 20X5.(c)Prepare journal entries to record the asset's acquisition, annual depreciation for each year, and the asset's eventual sale for $100,000. &R&"Myriad Web Pro,Bold"&20B-10.06 B-10.06 Worksheet 1 (ch 8)(a)YearAnnual ExpenseAccumulated Depreciation at End of YearAnnual Expense CalculationX3X4X5X6X7(b)Property, Plant & Equipment (20X5)EquipmentLess: Accumulated depreciation(c)GENERAL JOURNALDateAccountsDebitCredit1-JanTo record the purchase of press31-Dec20X3To record 20X3 depreciation31-Dec20X4To record 20X4 depreciation31-Dec20X5To record 20X5 depreciation31-Dec20X6To record 20X6 depreciation31-Dec20X7To record 20X7 depreciation31-Dec20X7To record disposal of asset &L&"Myriad Web Pro,Bold"&12Name: Date: Section: &R&"Myriad Web Pro,Bold"&20B-10.06 B-10.06 Problem 2 (ch 8)On January 1, 20X6, Outback Air purchased a new engine for one of its airplanes used to transport adventurers to remote regions of western Australia. The engine cost $750,000 and has a service life of 10,000 flight hours. Regulations require careful records of usage, and the engines must be replaced or rebuilt at the end of the 10,000 hour service period. Outback simply chooses to sell its used engines and acquire new ones. Used engines are expected to be resold for 1/3 of their original cost.Outback uses the units-of-output depreciation method.`(a)Assuming that the engine was used as follows, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. 20X6 1,500 hours 20X7 4,000 hours 20X8 3,000 hours 20X9 1,500 hours(b)Show how the asset and related accumulated depreciation would appear on a balance sheet at December 31, 20X7.(c)Prepare journal entries to record the asset's acquisition, annual depreciation for each year, and the asset's eventual sale for $250,000. B-10.07 Worksheet 2 (ch 8)(a)YearAnnual ExpenseAccumulated Depreciation at End of YearAnnual Expense CalculationX6X7X8X9(b)Property, Plant & Equipment (20X7)Aircraft engineLess: Accumulated depreciation(c)GENERAL JOURNAL  DateAccountsDebitCredit1-JanTo record the purchase of engine31-Dec20X6To record 20X6 depreciation31-Dec20X7To record 20X7depreciation31-Dec20X8To record 20X8 depreciation31-Dec20X9To record 20X9 depreciation31-Dec20X9To record disposal of asset B-10.07 Problem 3 (ch 8)On January 1, 20X1, Pagoda.

1. Problem 1 (ch 8)On January 1, 20X3, Perkins Printing
Corporation purchased a digital press for $1,450,000. It cost an
additional $50,000 to deliver, install, and calibrate the press.
This machine has a service life of 5 years, at which time it is
expected that the device will be scrapped for a $100,000 salvage
value.Perkins uses the straight-line depreciation
method.`(a)Prepare a schedule showing annual depreciation
expense, accumulated depreciation, and related calculations for
each year.(b)Show how the asset and related accumulated
depreciation would appear on a balance sheet at December 31,
20X5.(c)Prepare journal entries to record the asset's acquisition,
annual depreciation for each year, and the asset's eventual sale
for $100,000.
&R&"Myriad Web Pro,Bold"&20B-10.06
B-10.06
Worksheet 1 (ch 8)(a)YearAnnual ExpenseAccumulated
Depreciation at End of YearAnnual
Expense CalculationX3X4X5X6X7(b)Property, Plant &
Equipment (20X5)EquipmentLess: Accumulated
depreciation(c)GENERAL
JOURNALDateAccountsDebitCredit1-JanTo record the
purchase of press31-Dec20X3To record 20X3 depreciation31-
Dec20X4To record 20X4 depreciation31-Dec20X5To record
20X5 depreciation31-Dec20X6To record 20X6 depreciation31-
Dec20X7To record 20X7 depreciation31-Dec20X7To record
disposal of asset
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web
Pro,Bold"&20B-10.06
B-10.06
Problem 2 (ch 8)On January 1, 20X6, Outback Air purchased a
new engine for one of its airplanes used to transport adventurers
to remote regions of western Australia. The engine cost

2. $750,000 and has a service life of 10,000 flight hours.
Regulations require careful records of usage, and the engines
must be replaced or rebuilt at the end of the 10,000 hour service
period. Outback simply chooses to sell its used engines and
acquire new ones. Used engines are expected to be resold for
1/3 of their original cost.Outback uses the units-of-output
depreciation method.`(a)Assuming that the engine was used as
follows, prepare a schedule showing annual depreciation
expense, accumulated depreciation, and related calculations for
each year.
20X6 1,500 hours
20X7 4,000 hours
20X8 3,000 hours
20X9 1,500 hours(b)Show how the asset and related
accumulated depreciation would appear on a balance sheet at
December 31, 20X7.(c)Prepare journal entries to record the
asset's acquisition, annual depreciation for each year, and the
asset's eventual sale for $250,000.
B-10.07
Worksheet 2 (ch 8)(a)YearAnnual ExpenseAccumulated
Depreciation at End of YearAnnual
Expense CalculationX6X7X8X9(b)Property, Plant & Equipment
(20X7)Aircraft engineLess: Accumulated
depreciation(c)GENERAL
JOURNAL DateAccountsDebitCredit1-JanTo record the
purchase of engine31-Dec20X6To record 20X6 depreciation31-
Dec20X7To record 20X7depreciation31-Dec20X8To record
20X8 depreciation31-Dec20X9To record 20X9 depreciation31-
Dec20X9To record disposal of asset
B-10.07
Problem 3 (ch 8)On January 1, 20X1, Pagoda Pond Construction
acquired a small excavator for $85,000. This device had a 4-
year service life to Pagoda, at which time it is expected that the
equipment will be sold for a $10,000 salvage value.Pagoda uses
the double-declining balance depreciation method.`(a)Prepare a

3. schedule showing annual depreciation expense, accumulated
depreciation, and related calculations for each year.(b)Show
how the asset and related accumulated depreciation would
appear on a balance sheet at December 31, 20X3.(c)Prepare
journal entries to record the asset's acquisition, annual
depreciation for each year, and the asset's eventual sale for
$10,000.
B-10.08
Worksheet 3 (ch 8)(a)YearAnnual ExpenseAccumulated
Depreciation at End of YearAnnual
Expense CalculationX1X2X3X4(b)Property, Plant & Equipment
(20X3)EquipmentLess: Accumulated depreciation(c)GENERAL
JOURNALDateAccountsDebitCredit1-JanTo record purchase of
excavator31-Dec20X1To record 20X1 depreciation31-
Dec20X2To record 20X2 depreciation31-Dec20X3To record
20X3 depreciation31-Dec20X4To record 20X4 depreciation31-
Dec20X4To record disposal of asset
B-10.08
Problem 4 (ch 8)Ng's Shrimp Company owns a fishing vessel
that originally cost $250,000, with a 20-year life, and no
anticipated salvage value. Ng uses the straight-line
depreciation method. Review the following three independent
cases, and prepare the journal entry to reflect the disposition of
the boat in each case.Case 1After 8 years of ownership, the boat
was taken by a storm.Case 2After 12 years of ownership, the
boat was sold for $175,000.Case 3After 15 years of ownership,
the boat was sold for $60,000.
B-11.03
Worksheet 4 (ch 8)GENERAL
JOURNAL DateAccountsDebitCreditCase 1Case 2Case 3
B-11.03
Problem 5 (ch 12)Lawrence Bodine is employed by Baylor
Health Systems. During the month of June, Lawrence worked
195 hours. 15 of these hours were overtime, and were required
to be paid at 150% of the normal hourly rate. Lawrence's
hourly rate is $12.Lawrence is single, and had $400 of federal

4. income tax withheld from his pay. Baylor is in a state without
an income tax.Lawrence's pay is subject to social security taxes
at an (assumed) 6.5% rate and Medicare/Medicaid at an
(assumed) 1.5% rate. He has not exceeded the annual base for
social security taxes.Baylor pays for workers' compensation
insurance at a 4% rate. None of this cost is paid by the
employee.Baylor provides its employees with health care
insurance, and pays 90% of the $500 per employee monthly
premium. The other 10% is paid by employees via payroll
withholdings.Lawrence participates in a tax-sheltered deferred
savings plan and has 8% of his gross pay withheld each month.
Baylor Health Systems provides a 75% matching contribution.
In other words, for every dollar that Lawrence saves, Baylor
will contribute an additional 75 cents.Baylor's payroll is subject
to federal (0.5%) and state (1.5%) unemployment taxes on each
employee's gross pay, up to $8,000 per year. Lawrence had
$6,000 of gross earnings in the months prior to June.Lawrence
participates in the Community Chest fund drive each month, via
a $25 contribution that is withheld from his pay.(a)Complete
Lawrence's paycheck and the remittance advice (i.e., "paycheck
stub"). The blank worksheet will be very helpful for this
portion of the assignment.
B-12.08
Worksheet 5 (ch 12)(a)BAYLOR HEALTHCheck #95859Payroll
AccountDate:June 30, 20XXPay to the order of:First Corner
BankMEMO: June payroll for BodineJudy BaylorDetach below
before depositing, and save for your records:Employee: L.
BodineGross Earnings$ - 0Pay Period: June
20XXDeductions:Federal Income Tax$ - 0Social Security Tax-
0Medicare/Medicaid Tax- 0Insurance- 0Retirement Savings
Plan- 0Charity- 0- 0Net Pay$ - 0Supporting calculations:
B-12.08(a)
Problem 6 (ch 14)Prepare journal entries to record each of the
following independent stock issue situations.(a)Sherri Hui
Corporation issued 100,000 shares of $1 par value common
stock. The issue price was $30 per share.(b)Ariana Corporation

5. issued 50,000 shares of no par common stock for $10 per
share.(c)Laser Golf issued 40,000 shares of $100 par value
preferred stock. The issue price was $102 per
share.(d)Charleston Industries issued 5,000 shares of $5 par
value common stock for land with a fair value of $75,000.
B-14.03
Worksheet 6 (ch 14)GENERAL
JOURNAL DateAccountsDebitCredit(a)To record issue of
100,000 shares of $1 par value common stock at $30 per
share(b)To record issue of 50,000 shares of no par value
common stock at $10 per share(c)To record issue of 40,000
shares of $100 par value preferred stock at $102 per share(d)To
record issue of 5,000 shares of $5 par value common stock for
land with a fair value of $75,000
B-14.03
Problem 7 (ch 14)Krull Corporation presented the following
selected information. The company has a calendar year
end.Before considering the effects of dividends, if any, Krull's
net income for 20X7 was $2,500,000.Before considering the
effects of dividends, if any, Krull's net income for 20X8 was
$3,000,000.Krull declared $750,000 of dividends on November
15, 20X7. The date of record was January 15, 20X8. The
dividends were paid on February 1, 20X8.Stockholders' equity,
at January 1, 20X7, was $5,000,000. No transactions impacted
stockholders' equity throughout 20X7 and 20X8, other than the
impact of earnings and dividends on retained
earnings.(a)Prepare journal entries, if needed, to reflect the
dividend declaration, the date of record, and the date of
payment.(b)How much was net income for 20X7 and
20X8?(c)How much was total equity at the end of 20X7 and
20X8?(d)Is total "working capital" reduced on the date of
declaration, date of record, and/or date of payment?
B-14.04
Worksheet 7 (ch 14)(a)GENERAL
JOURNAL DateAccountsDebitCreditDeclareDateRecordDatePa
yDate(b)(c)(d)

6. B-14.04
Problem 8 (ch 14)Kenya Corporation had an equity structure
that consisted of $1 par value common stock, $3,500,000; paid-
in capital in excess of par, $17,500,000; and retained earnings,
$22,700,000.Transaction A
Believing that its share price was depressed due to general
market conditions, Kenya's board of directors authorized the
reacquisition of 250,000 shares of common stock. These
treasury shares were purchased at $10 per share.Transaction B
Subsequent to Transaction A, the stock price increased to $17
per share, and half of the treasury shares were sold in the open
market.Transaction C
Subsequent to Transaction B, Kenya experienced business
difficulties that necessitated it selling the remaining treasury
shares to raise additional cash. The shares were sold for $6 per
share.(a)Assuming that all 3,500,000 shares of Kenya were
issued at the same time and at the same price per share, what
was the original issue price? How does this compare to the
price paid in Transaction A, and is it rational for a company to
pay more to buy back shares than it originally received upon the
initial issuance?(b)Prepare an appropriate journal entry to
record Transaction A. Kenya records treasury shares at
cost.(c)Prepare an appropriate journal entry for Transaction
B.(d)Prepare an appropriate journal entry for Transaction
C.(e)Is there any income statement impact from these
transactions? What is the impact on total stockholders' equity
from each of the three transactions?
B-14.06
Worksheet 8 (ch 14)(a)(b)(c)(d)GENERAL
JOURNAL DateAccountsDebitCreditATo record acquisition of
250,000 treasury shares at $10 per shareBTo record reissue of
125,000 treasury shares at $17 per shareCTo record reissue of

7. 125,000 treasury shares at $6 per share(e)
B-14.06