UOP ACC 422 Week 3 WileyPlus Assignment
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Complete the following assignments in
WileyPLUS:
• Brief Exercise 10-10
• Exercise 10-3
• Exercise 10-13
• Exercise 11-6
• Exercise 11-15
• Exercise 11-15 (Essay)
• Exercise 11-24

• Exercise 12-1
• Exercise 12-4
• Exercise 12-14 (Part Level
Submission)
Brief Exercise 10-10
Larkspur Company traded a used
welding machine (cost $10,620,
accumulated depreciation $3,540)
for office equipment with an
estimated fair value of $5,900.
Larkspur also paid $3,540 cash in
the
transaction.
Prepare the journal entry to
record the exchange. (The
exchange has commercial
substance.)
Exercise 10-3
Whispering Corporation operates
a retail computer store. To
improve delivery services to
customers, the company
purchases four new trucks on
April 1, 2017. The terms of
acquisition for each truck are
described
below.
1. Truck #1 has a list price of
$31,350 and is acquired

borrowing, and the dealership has an incremental
borrowing rate of 8%.
3. Truck #3 has a list price of $33,440. It is
acquired in exchange for a computer system that
Whispering
carries in inventory. The computer system cost
$25,080 and is normally sold by Whispering for
$31,768. Whispering uses a perpetual inventory
system.
4. Truck #4 has a list price of $29,260. It is
acquired in
exchange for 1,030 shares of common stock in
Whispering Corporation. The stock has a par value
per share of $10 and a market price of $13 per
share.
Prepare the appropriate journal entries for the
above transactions for Whispering Corporation.
Exercise 10-13
Presented below is information related to Pronghorn
Company.
1. On July 6, Pronghorn Company acquired the plant
assets of Doonesbury Company, which had
discontinued operations. The appraised value of the
property is:
Land $419,000 Buildings 1,257,000

Equipment 838,000
Total $2,514,000
Pronghorn Company gave 12,500 shares of its $100
par value common stock in exchange. The stock had a
market price of $205 per share on the date of the
purchase of the property.
2. Pronghorn Company expended the following
amounts in cash between July 6 and December 15, the
date when it first occupied the building. (Prepare
consolidated entry for all transactions below.)
Repairs to building $114,890 Construction of bases
for equipment to be installed
later 141,980
Driveways and parking lots 124,400 Remodeling of
office space in building, including new partitions and
walls 147,440 Special assessment by city on land
17,540
3. On December 20, the company paid cash for
equipment, $305,900, subject to a 2% cash discount,
and freight on equipment of $10,100.
Exercise 11-6
Sage Company purchased equipment for $231,080 on
October 1, 2017. It is estimated that the equipment
will have a useful life of 8 years and a salvage value of

$13,080. Estimated production is 40,000 units and
estimated working hours are 20,300. During 2017,
Sage uses the equipment for 520 hours and the
equipment produces 1,000 units.
Compute depreciation expense under each of the
following methods. Sage is on a calendar-year basis
ending December 31.
Exercise 11-15
Compute the depreciation charge on this equipment
for 2012, for 2019, and the total charge for the period
from 2013 to 2018, inclusive, under each of the six
following assumptions with respect to partial periods.
Your answer has been saved and sent to the instructor.
See Gradebook for score details.
On March 10, 2019, Lost World Company sells
equipment that it purchased for $192,000 on August
20, 2012. It was originally estimated that the
equipment would have a life of 12 years and a salvage
value of $16,800 at the end of that time, and
depreciation has been computed on that basis. The
company uses the straightline method of depreciation.
Following are the assumptions with respect to partial
periods:

(1) Depreciation is computed for the exact period
of time during which the asset is owned. (Use 365
days
for the base and record depreciation through March
9,
2019.)
(2) Depreciation is computed for the full year on
the
January 1 balance in the asset account.
(3) Depreciation is computed for the full year on
the
December 31 balance in the asset account.
(4) Depreciation for one-half year is charged on
plant assets acquired or disposed of during the year.
(5) Depreciation is computed on additions from
the beginning of the month following acquisition and
on
disposals to the beginning of the month following
disposal.
(6) Depreciation is computed for a full period on all
assets in use for over one-half year, and no
depreciation is charged on assets in use for less than
one-half year. (Use 365 days for base.)
Briefly evaluate the methods above, considering
them from the point of view of basic accounting
theory as well as simplicity of application.
Exercise 11-24
The 2014 Annual Report of Tootsie Roll Industries
contains the following information.

(in millions)
December 31, 2014
December 31, 2013
Total assets $910.4
$888.4
Total liabilities 219.3
208.1
Net sales 539.9
539.6
Net income 63.2 60.8
Compute the following ratios for Tootsie Roll for 2014.
Exercise 12-4
Presented below is selected information for Cullumber
Company.
Answer the questions asked about each of the factual
situations.

1. Cullumber purchased a patent from Vania Co. for
$1,230,000 on January 1, 2015. The patent is being
amortized over its remaining legal life of 10 years,
expiring on January 1, 2025. During 2017, Cullumber
determined that the economic benefits of the patent
would not last longer than 6 years from the date of
acquisition. What amount should be reported in the
balance sheet for the patent, net of accumulated
amortization, at December 31, 2017?
2. Cullumber bought a franchise from Alexander Co.
on January 1, 2016, for $365,000. The carrying
amount of the franchise on Alexander's books on
January 1, 2016, was $515,000. The franchise
agreement had an estimated useful life of 30 years.
Because Cullumber must enter a competitive bidding
at the end of 2018, it is unlikely that the franchise
will be retained beyond 2025. What amount should
be amortized for the year
ended December 31, 2017?
3. On January 1, 2017, Cullumber incurred
organization costs of $282,500. What amount of
organization expense should be reported in 2017?
4. Cullumber purchased the license for distribution
of a popular consumer product on January 1, 2017,
for $153,000. It is expected that this product will
generate cash flows for an indefinite period of time.
The license

has an initial term of 5 years but by paying a nominal
fee, Cullumber can renew the license indefinitely for
successive 5-year terms. What amount should be
amortized for the year ended December 31, 2017?
Exercise 12-14 (Part Level Submission) Presented
below is net asset information related to the Skysong
Division of Santana, Inc.
The purpose of the Skysong Division is to develop a
nuclear-powered aircraft. If successful, traveling
delays associated with refueling could be substantially
reduced. Many other benefits would also occur. To
date, management has not had much success and is
deciding whether a write-down at this time is
appropriate. Management estimated its future net
cash flows from the project to be $425 million.
Management has also received an offer to purchase
the division for $330 million. All identifiable assets'
and liabilities' book and fair value amounts are the
same.

has an initial term of 5 years but by paying a nominal
fee, Cullumber can renew the license indefinitely for
successive 5-year terms. What amount should be
amortized for the year ended December 31, 2017?
Exercise 12-14 (Part Level Submission) Presented
below is net asset information related to the Skysong
Division of Santana, Inc.
The purpose of the Skysong Division is to develop a
nuclear-powered aircraft. If successful, traveling
delays associated with refueling could be substantially
reduced. Many other benefits would also occur. To
date, management has not had much success and is
deciding whether a write-down at this time is
appropriate. Management estimated its future net
cash flows from the project to be $425 million.
Management has also received an offer to purchase
the division for $330 million. All identifiable assets'
and liabilities' book and fair value amounts are the
same.