Questions from Intermediate Accounting

Q: Early in 2021, the Excalibur Company began developing a new software

Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2021 at a cost of $6 million. Of this amount, $4 million was spent be...

Q: King Supply maintains its internal inventory records using perpetual FIFO, but

King Supply maintains its internal inventory records using perpetual FIFO, but for financial reporting purposes, reports ending inventory and cost of goods sold using periodic LIFO. At the beginning o...

Q: On September 30, 2021, Athens Software began developing a software

On September 30, 2021, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, 2022, and th...

Q: Freitas Corporation was organized early in 2021. The following expenditures were

Freitas Corporation was organized early in 2021. The following expenditures were made during the first few months of the year: Required: Prepare a summary journal entry to record the $107,000 in cash...

Q: The Manguino Oil Company incurred exploration costs in 2021 searching and drilling

The Manguino Oil Company incurred exploration costs in 2021 searching and drilling for oil as follows: It was determined that Wells 104–108 were dry holes and were abandoned. Wells 1...

Q: Jackpot Mining Company operates a copper mine in central Montana. The

Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,000,000 in 2021 for the mining site and spent an additional $600,000 to prepare the mine for extraction of the cop...

Q: In 2021, Bratten Fitness Company made the following cash purchases:

In 2021, Bratten Fitness Company made the following cash purchases: 1. The exclusive right to manufacture and sell the X-Core workout equipment from Symmetry Corporation for $200,000. Symmetry created...

Q: On March 31, 2021, Wolfson Corporation acquired all of the

On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,000,000 in cash. The book values and fair values of Barney’s assets...

Q: On January 1, 2021, the Excel Delivery Company purchased a

On January 1, 2021, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year p...

Q: Mercury Inc. purchased equipment in 2019 at a cost of $

Mercury Inc. purchased equipment in 2019 at a cost of $400,000. The equipment was expected to produce 700,000 units over the next five years and have a residual value of $50,000. The equipment was sol...