Details
Minicase 3
The Mallory Corporation
On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record.
| MALLORY CORPORATION – FIXED ASSETS | ||||||||||||
| Equipment | Cost | Salvage | Life | Method of Depreciation | ||||||||
| Machine 1 | $65,000 | $5,000 | 5 | DDB purchased 1/1/2006 | ||||||||
| Building #3 | $900,000 not including land | $50,000 | 25 | S/L purchased 6/30/2006 | ||||||||
| Mine 316 | $1,000,000 | $0 | 1,000,000 tons | 30,000 tons extracted. Mine purchased 1/1/2006 | ||||||||
| Patent | $50,000 | 0 | 17 | Purchased 1/1/2006 | ||||||||
| Truck 1 | $35,000 | $3,000 | 200,000 miles | Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 | ||||||||
| REQUIRED:
· Compute the depletion, amortization, and depreciation expense on December 31, 2006 for each asset listed above · Record the depreciation journal entries for the assets above · Suppose that Machine 1 was sold for $40,000 on 12/31/2008, record the entry · Suppose that the corporation spent $20,000 in 2006 to defend the patent. Record the entry. · Financial Reporting on Fixed Assets: § Prepare a partial balance sheet statement for Mallory Corporation showing Fixed and Intangible assets |
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