Question 1A. Caro Inc. purchases a delivery truck for $18,000. Thetruck has a salvage value of $4,000 and is expected to be driven for 124,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 24,000 miles. Calculate the annual depreciation expense.B. A $40,000, three-month, 5% note payable was issued on December 1, 2016. What is the amount of accrued interest on December 31, 2016? C. Barter Inc. issued bonds with a $400,000 face value, 10% interest rate, and a 4-year term on July 1, 2020, and received $440,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions.1) July 1, 2020: entry to record issuing the bonds 2) Dec. 31, 2020: entry to record payment of interest to bondholders 3) Dec. 31, 2020: entry to record amortization of premiumQuestion 2 Autumn Corporation was organized in July. It is authorized to issue 100,000 shares of $100 par value 6% preferred stock. It is also authorized to issue 500,000 shares of $4 par value common stock. Journalize the transactions below: Aug. 22Issued 2,000 shares of preferred stock at $104 per share. Sep. 3Issued 80,000 shares of common stock at $15.25 per share. Oct. 11Issued 12,000 shares of common stock for land valued at $146,000. The stock is currently trading at $12 per share, and the stock’s trading value is a more accurate determinant of the land’s value. Nov. 12Issued 5,000 shares of common stock at $12 per share. Dec. 5Issued 1,000 shares of preferred stock at $110 per share. Question 3The partnership of John and Judy shares profits and losses in a 60:40 ratios respectively after Sarah receives a 10,000 salary and Rick receives a 15,000 salary. A. Prepare a schedule showing how the profit of $60,000 should be divided and show the resulting journal entry to each partner’s capital account. B. Prepare a schedule showing how the loss of ($8,000) should be divided and show the resulting journal entries to each partner’s capital account. C. What are five (5) Characteristics of a Partnership. Question 4 Required:Use the following excerpts from Yardley Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.

Hi studentSince there are multiple questions, we will answer only first question.Depreciation is the…

Answered: Question 1 A. Caro Inc. purchases a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PB: Montezuma Inc. purchases a delivery truck for $20,000. The truck has a salvage value of $8,000 and...

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Question 1

A. Caro Inc. purchases a delivery truck for $18,000. Thetruck has a salvage value of $4,000 and is expected to be driven for 124,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 24,000 miles. Calculate the annual depreciation expense.

B. A $40,000, three-month, 5% note payable was issued on December 1, 2016. What is the amount of accrued interest on December 31, 2016?

C. Barter Inc. issued bonds with a $400,000 face value, 10% interest rate, and a 4-year term on July 1, 2020, and received $440,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions.

1) July 1, 2020: entry to record issuing the bonds

2) Dec. 31, 2020: entry to record payment of interest to bondholders

3) Dec. 31, 2020: entry to record amortization of premium

Question 2

Autumn Corporation was organized in July. It is authorized to issue 100,000 shares of $100 par value 6% preferred stock. It is also authorized to issue 500,000 shares of $4 par value common stock. Journalize the transactions below:

Aug. 22	Issued 2,000 shares of preferred stock at $104 per share.
Sep. 3	Issued 80,000 shares of common stock at $15.25 per share.
Oct. 11	Issued 12,000 shares of common stock for land valued at $146,000. The stock is currently trading at $12 per share, and the stock’s trading value is a more accurate determinant of the land’s value.
Nov. 12	Issued 5,000 shares of common stock at $12 per share.
Dec. 5	Issued 1,000 shares of preferred stock at $110 per share.

Question 3

The partnership of John and Judy shares profits and losses in a 60:40 ratios respectively after Sarah receives a 10,000 salary and Rick receives a 15,000 salary.

A. Prepare a schedule showing how the profit of $60,000 should be divided and show the resulting journal entry to each partner’s capital account.

B. Prepare a schedule showing how the loss of ($8,000) should be divided and show the resulting journal entries to each partner’s capital account.

C. What are five (5) Characteristics of a Partnership.

Question 4

Required:

Use the following excerpts from Yardley Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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