Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 50

Analyzing and Recording Long-Lived Asset Transactions with Partial-Year Depreciation
Randy's Restaurant Company (RRC) entered into the following transactions during a recent year.

Required:
1. Analyze the accounting equation effects and record journal entries for each of the transactions.
2. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Randy's Restaurant Company should report for the quarter ended June 30. For convenience, the food locker and air-conditioning system are depreciated as a group using the straight-line method with a useful life of five years and no residual value.
3. Prepare a journal entry to record the depreciation calculated in requirement 2.
4. What advice would you offer the company in anticipation of switching to IFRS in the future