On January 1,2012,Orbit,Inc.purchased land and a building for a total of $90,000 by paying $20,000 cash and issuing a note for the rest.The market value of the building was appraised at $80,000 and the land at $20,000.Write in both the correct dollar amounts and the account titles involved.Use a plus for increases and parentheses ()for decreases.
Part A: Show the effect of the purchase on the accounting equation.
Part B: Show the effect of the first year's depreciation,assuming the straight-line method and an estimated useful life of 20 years with a $32,000 salvage value.
Part C: Show the effect of the first year's depreciation,assuming double-declining depreciation and an estimated useful life of 20 years with a $32,000 salvage value.
Part D: Show the amounts that would appear on the annual financial statements at the end of the THIRD YEAR for each method.

Question

On January 1,2012,Orbit,Inc.purchased land and a building for a total of $90,000 by paying $20,000 cash and issuing a note for the rest.The market value of the building was appraised at $80,000 and the land at $20,000.Write in both the correct dollar amounts and the account titles involved.Use a plus for increases and parentheses ()for decreases.
Part A: Show the effect of the purchase on the accounting equation.
  Part B: Show the effect of the first year's depreciation,assuming the straight-line method and an estimated useful life of 20 years with a $32,000 salvage value.
  Part C: Show the effect of the first year's depreciation,assuming double-declining depreciation and an estimated useful life of 20 years with a $32,000 salvage value.
  Part D: Show the amounts that would appear on the annual financial statements at the end of the THIRD YEAR for each method.

Quizplus · Accepted Answer

The Answer of On January 1,2012,Orbit,Inc.purchased land and a building for a total of $90,000 by paying $20,000 cash and issuing a note for the rest.The market value of the building was appraised at $80,000 and the land at $20,000.Write in both the correct dollar amounts and the account titles involved.Use a plus for increases and parentheses ()for decreases.
Part A: Show the effect of the purchase on the accounting equation.
  Part B: Show the effect of the first year's depreciation,assuming the straight-line method and an estimated useful life of 20 years with a $32,000 salvage value.
  Part C: Show the effect of the first year's depreciation,assuming double-declining depreciation and an estimated useful life of 20 years with a $32,000 salvage value.
  Part D: Show the amounts that would appear on the annual financial statements at the end of the THIRD YEAR for each method.