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

Exercise 45

Analyzing and Recording Long-Lived Asset Transactions with Partial-Year Depreciation
Precision Construction 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 Precision Construction should report for the quarter ended March 31. Tire equipment is depreciated using the double-declining-balance method with a useful life of five years and $40,000 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