Case Answer - Barry\'s Batting Cages PDF

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Case Answer - Barry's Batting Cages...

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BARRY'S BATTING CAGES LTD. LAND AND BUILDING 1.)

Dr Depreciation Expense Cr A/D - Building (312,000-31,000)/30=9,367

9,367 9,367

PITCHING MACHINES Nov. 1/11

Aug. 31/12 76,540 balls each

5 Machines H.C. 5,000 (each) U.L. 800K Balls (ea) R.V. 300 (each) U.O.O. Method

2.)

3.)

Oct. 31/12 New 15,271 Old 13,456

3 Machines traded in Allowance: 3,000 (each) H.C. 6,500 (each) U.L. 1 million balls (ea) R.V. $0

FYE

AUGUST 31/12 Dr Depreciation Expense Cr A/D Pitching Machines ((5,000-3,000)/800,000)*76,540=450 (each) 450*5 = 2,250 Dr New Pitching Machines Dr A/D Pitching Machines Dr Loss on Trade Cr Pitching Machines Cr Cash

2,250 2,250

19,500 4,587 1,413 15,000 10,500

New Machines: 6,500*3 = 19,500 A/D Pitching Machines: (5,395+2,250)*(3/5)=4,587 Pitching Machines: 5,000*3=15,000 Cash: (6,500*3)-(3,000*3)=10,500 NBV: H.C. -A/D = 15,000-4,587=10,413 (Since the NBV > Trade In ----> LOSS) LOSS: NBV - Trade In = 10,413 - 9,000 = 1,413

4.)

OCTOBER 31/12 Dr Depreciation Expense

158

Cr A/D Pitching Machines ((5,000-300)/800,000)*13,456 balls each * 2 machines=158 5.)

Dr Depreciation Expense Cr A/D - New Pitching Machines ((6,500-0)/1,000,000)*15,271 balls each * 3 machines = 298

158

298 298

BATTING CAGES Nov. 1/11

June 8/12 76,540 balls each

5 CAGES H.C. 11,500 U.L. 5 years R.V. 150 (each) S.L. Method

6.)

7.)

Oct. 31/12 New 15,271 Old 13,456

4,000 Repair

JUNE 8/12 Dr Repairs Expense Cr Cash

FYE

4,000 4,000

OCTOBER 31/12 Dr Depreciation Expense Cr A/D - Batting Cages (11,500-750)/5*(12/12)=2,150

2,150 2,150

TOKEN MACHINE Nov. 1/11

Oct. 31/12 12 MONTHS

H.C. 21,000 U.L. 7 years R.V. 1,200 D.D.B. Method

8.)

OCTOBER 31/12 Dr Depreciation Expense Cr A/D - Token Machine (21,000-10,286)*2/7=3,061

FYE Impaired R.A. 5,000

3,061 3,061

NBV = 21,000 - 10,286 - 3,061 = 7,653 (Since the NBV > RV this amount of depreciation is allowable)

9.)

Dr Impairment Loss Cr A/D - Token Machine Carrying Amount = 21,000-10,286-3,061=7,653 Recoverable Amount = 5,000 Impairment Loss = 7,653-5,000 = 2,653

2,653 2,653

COMPUTER Nov. 1/11 0.5 months H.C. 21,000 U.L. 7 years R.V. 1,200 D.D.B. Method

10.)

11.)

Nov. 14/11

Dec. 26/11 1.5 months

Disposed $150

NOVEMBER 14/12 Dr Depreciation Expense Cr A/D - Computer (2,200-100)/4)*(0.5/12)=22 Dr A/D - Computer Dr Loss on Disposal Cr Computer Cr Cash

Oct. 31/12 10 months

Bought New H.C. 3,500 R.V. 50 T.D.B. Method U.L. 4 Years

FYE

22 22

1,072 1,278 2,200 150

A/D-Computer: 1,050 (O/B) + 22 (T 10) = 1072 Computer: Taken from Balance Sheet Cash: Given in Case LOSS: 2,200+150-1,072=1,278

12.)

DECEMBER 26/12 Dr Computer Cr Cash OCTOBER 31/12

3,500 3,500

13.)

Depreciation Expense Cr A/D Computer (3,500-0)*(3/4)*(10/12)=2,188

2,188 2,188...