Author Question: ______________________________ in an internal control system means assessment by management to ... (Read 72 times)

Ebrown · **on:** Jul 5, 2018

___________________ ___________ in an internal control system means assessment by management to determine whether the control plans in place are continuing to function appropriately over time.
Fill in the blank(s) with correct word

Question 2

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.

Assets
Liabilities Shareholders' equity
CC Retained earnings

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.

Assets
Liabilities Shareholders' equity
CC Retained earnings

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.

Assets
Liabilities Shareholders' equity
CC Retained earnings

Part D: Show the amounts that would appear on the annual financial statements at the end of the THIRD YEAR for each method.
Straight-line Double-declining balance
1. Depreciation expense
2. Accumulated depreciation
3. Building (net of accumulated
depreciation)
4. Land

What will be an ideal response?

Zebsrer · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Monitoring

Answer to Question 2

Part A:
Assets
Liabilities Shareholders' equity
CC Retained earnings
(20,000) Cash
+ 72,000 Building
+ 18,000 Land + 70,000 Notes payable
For the building: (80,000 / 100,000) x 90,000 = 72,000For the land: (20,000 / 100,000) x 90,000 = 18,000

Part B:
Assets
Liabilities Shareholders' equity
CC Retained earnings
(2,000) Accumulated depreciation (2,000) Depreciation
expense
Straight-line depreciation:(72,000 32,000) / 20 years = 2,000 per year

Part C:
Assets
Liabilities Shareholders' equity
CC Retained earnings
(7,200) Accumulated
depreciation (7,200) Depreciation
expense
Double-declining balance depreciation:72,000 x (2 / 20 years) = 7,200 for the first year(72,000 7,200) x (2 / 20) = 6,480 for the second year(72,000 13,680) x (2 / 20) = 5,832 for the third year

Part D:
Straight-line Double-declining balance
1. Depreciation expense 2,000 5,832
2. Accumulated depreciation (6,000) = 3 x (2,000) (19,512)
3. Building (net of accumulated
depreciation) 66,000 = 72,000 6,000 52,488 = 72,000 19,512
4. Land 18,000 18,000