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3 years ago

Consider each of the transactions below. All of the expenditures were made in cash.

Business

1 answer:

mestny [16]3 years ago

3 0

Answer: Please see explanation column for answers

Explanation:

1.Journal to record amount spent on experimental purposes for development of new product

Date Account Debit Credit

Research and development expense $ 22,000.00

Cash $22,000.00

2. Journal to record amount paid for legal fees for lost in infringement suit

Date Account Debit Credit

April legal fee expense $7,000.00

Cash $ 7,000.00

3. Journal to record amount and note payable for purchase of equipment

Date Account Debit Credit

March Equipment $ 35,000.00

Discount on note payable 4,000.00

Cash $ 16,000.00

Note payable $ 23,000.00

Calculation:

Discount on note payable= (23,000 +16,000)- $35,000 = $4000

4Journal to record amount paid for installation of sprinkler system

Date Account Debit Credit

June 1 Building- sprinkler system $ 38,000.00

Cash $ 38,000.00

Journal to record amount received by plaintiff for successful infringement

Date Account Debit Credit

patent $ 22,000.00

Cash $ 22,000.00

6.Journal to record purchase of new machine in exchange of old one

Date Account Debit Credit

new machine-fair value $ 13,000.00

lost in trade-in $ 3,000.00

Accumulated depreciation $6,400.00

old machine $ 12,400.00

Cash $ 10,000.00

Calculation:

lost in trade-in = book value of old machine + cash paid for machine - fair value of new equipment =(6000+10000-13000)

= $3000

Accumulated depreciation=original cost of old machine - book value = $12400- $6000=$6,400

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