Chong, Annie Michelle

FINACC Assignment

Case No. 7-1 Stern Corporation

1. Journal Entries

Cash 3866
Accumulated Depreciation 27367
Factory Machine 31233

Depreciation Expense 7850

Tools 7850

Depreciation Expense
Accumulated Depreciation - Automotive

Cash 2336
Accumulated Depreciation 5458
Loss of sale on asset 560
Automotive Equipment 8354

Amortization Expense - Patent 11250

Patent 11250

Cash 80
Accumulated Depreciation - Furniture 432
Furniture and Fixtures 490
Gain from Furniture and Fixtures 22

Depreciation Expense 407279

Accumulated Depreciation – Buildings 48105
Accumulated Depreciation - Factory Machinery 339435
Accumulated Depreciation – Furniture and Fixtures 5600
Accumulated Depreciation – Automotive Equipment 9989
Accumulated Depreciation – Office Machines 4151
 2. Give the correct totals for property, plant and equipment, and the amount of accumulated
depreciation as of December 31, 2010 after the transactions affecting them had been recorded.

Gross Accumulated Net

Depreciation
Land 186563 186563
Buildings 2405259 711484 1693775
Factory Machinery 3394352 1954426 1439926
Furniture and Fixtures 55994 45605 10390
Automotive Equipment 49944 41965 7979
Office Machine 41507 31129 10378
Tools 53444 53444
Patent ______45000 ___________ _____45000

Total 6232063 2748608 3447455

Case No. 7 – 3 Stafford Press

1. Analyze the effect of each of these transactions on the items in the balance sheet and income
statement. For transactions that affect owner’s equity, distinguish between those that affect the
net income of the current year and those that do not. In most cases, the results of your analysis
can be set forth most clearly in the form of journal entries.

1.)

Land 34004
Building 350064
Accumulated Depreciation 199056
Book Value 151008

Total 185042

Cash received 149860

Total value of land and buildings 185042
(35182)

Cash 149860
Accumulated Depreciation - Buildings 199056
Loss of Sale on Land and Building 35182
Land 34034
Building 350064

2.)

Equipment 73645
Accumulated Depreciation 40890
Book Value 32755

Cash received 35200

Total value of equipment 32755
Gain on the sale 2445

Cash 35200
Accumulated Depreciation - Equipment 40890
Equipment 73645
Gain on Sale of Equipment 2445
3.)

Payment 109868
Freight 450
Installation 900

Total 111218

Equipment 111218
Cash 111218

4.)

Payment for the land purchased 140000

Payment for razing old buildings ______21235

Total 161235

Land Improvements 13950

Land 161235
Land Improvements 13950
Cash 175185

5.)

Cost of new machine 28030

Trade in allowance _____7200
Cash payment 20830

Equipment - old 12000

Accumulated Depreciation 5200
Book Value 6800

Gain on purchase 400

Equipment 28030
Accumulated Depreciation - Equipment 5200
Cash 20830
Equipment - old 12000
Gain on the Exchange 400
6.)

Building 561000
Cash 136000
Mortgage Payable 425000

7.)

Various Expenses 10315

Cash 10315

8.)

Equipment 3220
Cash 3220
 3. Adjust the balance sheet in Exhibit 1 to show the effect of these transactions.

STAFFORD PRESS
Condensed Balance sheet
After Moving

Assets Liabilities and Owner’s Equity

Current Assets Current Liabilities 160223

Cash 124160 Non-Current Liabilities 425000
Other Current Assets 251790 Common Stock 357348
Total Current Assets 375950 Retained Earnings 358648
Property and Equipment
Land 161235
Land Improvements 13950
Buildings 561000
Less: Accum Dep - 561000
Equipment 321916
Less: Accum Dep 132832 189084

Total Assets 1301219 TLOE 1301219