1) Long-term debt Rs.

190
Cash (1)
Total stockholders' equity (2)
Total liabilities (3)
Accounts receivable 450
Common stock 75
Inventory 375
Accounts payable 575
Property, plant, and equipment 525
Additional stockholders' equity 650
Other assets 200
Other liabilities (4)
Total assets 2,000

Using the balance sheet equation as a starting point, determine the missing amounts: (1), (2),
(3), and (4) above.

2) Analyze the following transactions in the balance sheet equation using the following
worksheet.
1. Initial investment of Rs. 300,000 by the owner
2. Acquire equipment for Rs. 25,000 cash
3. Acquire inventory for Rs. 6,000 on credit
4. Obtain loan of Rs. 15,000 from the bank
5. Returned Rs. 600 of inventory to supplier
6. Payment to creditor for amount of inventory purchase less amount returned

Note Accounts
Transaction Cash Inventory Equipment Payable Payable Capital
1
2
3
4
5
6

3) Given below are the daily balances in the accounts of Travel Tips, Inc.. Assuming only one
transaction occurred each day, explain the nature of each transaction from June 1 to June 10.

Accounts Owner,
Cash Receivable Inventory Equipment Payable Capital
Bal. Rs. 6,000 Rs. 3,000 Rs. 8,000 Rs. 7,000 Rs. 4,000 Rs.20,000
June 1 6,000 3,000 8,700 7,000 4,700 20,000
June 2 6,600 2,400 8,700 7,000 4,700 20,000
June 3 5,800 2,400 8,700 7,000 3,900 20,000
June 4 6,900 2,400 8,700 7,000 3,900 21,100
June 5 5,600 2,400 8,700 9,600 5,200 21,100
June 6 5,600 2,400 8,200 9,600 4,700 21,100
June 7 6,100 3,700 8,200 7,800 4,700 21,100
June 8 4,000 3,700 8,200 7,800 4,700 19,000
June 9 3,200 3,700 9,000 7,800 4,700 19,000
June 10 3,200 3,700 9,000 9,500 4,700 20,700

Answer:
For example: June 1: Acquired Rs. 700 of inventory on credit.

4) Abigail and Amanda started the ACL Partnership on September 1, 20X9. Given the following
transactions, prepare a balance sheet for the partnership as of September 10, 20X9.

Sept. 1 The ACL Partnership was formed as Abigail invested Rs. 9,000 in cash and Amanda
invested Rs. 4,100 worth of supplies and Rs. 4,700 in cash.
Sept. 2 ACL acquired Rs. 3,600 in inventory, paying cash.
Sept. 4 ACL acquired equipment costing Rs. 23,900, making a Rs. 3,500 cash down payment,
with the balance due on a note.
Sept. 5 ACL returned Rs. 300 worth of defective inventory and received a refund.
Sept. 7 ACL acquired inventory costing Rs. 800 on open account.
Sept. 8 ACL sold equipment costing Rs. 1,700 at cost. A close friend, purchased the equipment
on account.
Sept. 9 ACL paid Rs. 400 associated with the inventory acquired on September 7.
Sept. 10 ACL received Rs. 400 from the friend who acquired equipment on September 8.

Required:
1. Prepare an analysis of the transactions on the balance sheet equation.
2. Prepare a balance sheet as of September 10, 20X9 for ACL Partnership.

5) The accountant for Tibbo Industries is required to prepare monthly financial statements.
Upon opening the file with the previous month's balance sheets, the accountant notices that
they have been prepared incorrectly. Prepare a corrected November balance sheet based on
the information below.
Balance Sheet for
Tibbo Industries
Prepared on
November 29, 2009
Assets Liabilities and Owners' Equity
Merchandise inventory 8,000 Office supplies 500
Accounts payable 4,500 Long term debt 18,000
Cash 9,000 Owners equity 50,500
Owners' equity 50,500 Prepaid expenses 5,000
Property and equipment 50,500

6) Analyze the following transactions in the accounting equation using the following worksheet.
1. Sales of inventory for Rs. 20,000 on account; merchandise cost is Rs. 13,000.
2. Rent payment made in advance for Rs. 1,500.
3. Acquire additional inventory for Rs. 8,000; paid Rs. 2,000 cash with remainder on credit.
4. Received payment of Rs. 4,000 from customer who purchased goods on credit last month.
5. Returned defective inventory in the amount of Rs. 500. The inventory was purchased on
account.

Accounts Prepaid Accounts Retained

Cash Receivable Inventory Rent Payable Earnings
1
1
2
3
4
5

7) Use the following balance sheet equation format to show the effect of the following
transactions. Write the account names that will be used for each transaction.

Total Paid-in Retained

Account name Total assets liabilities capital Earnings

1. The owners invest Rs. 42,000 in the company.

2. The company purchases equipment costing Rs. 6,000, paying Rs. 2,000 with the remainder as
a note payable.
3. The company acquires inventory costing Rs. 2,500, paying Rs. 1,500 with the remainder on
account.
4. Depreciation on the equipment was Rs. 200.

8) The Dyer Corporation began business operations on April 1, 20X9. The following transactions
occurred during April 20X9:
1. The owner invested Rs. 32,000 in the company.
2. Inventory costing Rs. 13,000 was purchased. Rs. 900 in cash was paid; the remainder was put
on account.
3. Equipment costing Rs. 23,000 was purchased, of which one-half was paid in cash. The
remainder was paid with a note payable. Ignore interest expense. Depreciation for the month
relating to the equipment was Rs. 1,500.
4. The rent for April, May, and June 20X9 was paid. The rent payment was Rs. 1,200.
5. Cash sales during the month totaled Rs. 8,900. The cost of the inventory sold was Rs. 5,100.
6. Credit sales during the month totaled Rs. 11,000. The cost of the inventory sold was Rs.
7,500.
7. The wages earned by the employees for the month were Rs. 4,000, although only Rs. 3,500
had been paid as of the end of the month.

Given the previous transactions, determine the net income or loss using the accrual basis for
the Dyer Corporation for the month of April, 20X9.

9) Dynamic Enterprises had the following information during November 20X9:

Inventory purchases on account Rs. 6,800. Inventory purchases for cash Rs. 2,800.
Sales on account Rs. 15,000. Cash sales Rs. 3,500.

1. Cost of goods sold on cash and credit sales Rs. 9,200

2. Payment of 3 months' rent in advance (1
month's rent should be recognized in November) 2,100
3. Payment of inventory purchased on account 3,000
4. Collections from credit customers 9,900
5. Wages earned and paid during November 5,000
6. Wages earned but not paid during November 3,200
7. Credit purchases of supplies 1,200
8. Supplies used during November 200

Required:
Prepare an income statement for Dynamic Enterprises for the month of November, 20X9, under
the accrual basis.

10) Following is the balance sheet for Value Creation, Inc. as of January 31, 20X9:

Value Creation, Inc.

Balance Sheet
January 31, 20X9

Assets: Liabilities:
Cash Rs. 7,100 Accounts Payable Rs. 6,200
Accounts Receivable 4,000 Notes Payable 8,300
Merchandise Inventory 13,500 Total Liabilities 14,500
Prepaid Rent 3,300 Stockholders' Equity:
Store Equipment 15,600 Paid-in Capital Rs. 17,600
Retained Earnings 11,400
Total Stockholders' equity 29,000
Total Assets Rs. 43,500 Total Liab. and Stockholders' Equity Rs.43,500
The following transactions occurred during January:
1. The company paid Rs. 2,100 of the accounts payable.
2. The company acquired Rs. 3,500 of merchandise inventory, paying 40% in cash and the
remainder on open account.
3. The utility bill of Rs. 1,400 for the month of January was paid.
4. The company received Rs. 2,200 from its credit customers.
5. Sales of merchandise inventory for the month of January totaled Rs. 22,500, of which Rs.
10,000 was paid in cash and the remaining amount was on open account. The cost of the
merchandise sold was Rs. 15,000.
6. The company paid Rs. 1,600 of the note payable. Ignore interest expense.
7. Depreciation on the store equipment was Rs. 900 for the month.
8. Additional store equipment of Rs. 1,700 was acquired. Of this amount, Rs. 700 was paid in
cash and the remainder was added to the note payable balance.
9. The balance in the prepaid rent account represented 3 months' worth of rent paid in advance
as of January 31, 20X9.

11) Following is the balance sheet for the Pratley Corporation as of March 31, 20X9:

Assets Liabilities
Cash Rs. 7,100 Accounts Payable Rs. 6,200
Accounts Receivable 4,000 Notes Payable 8,300
Merchandise Inventory 13,500 Total Liab. 14,500
Prepaid Rent 3,300 Paid-in Capital Rs. 17,600
Store Equipment 15,600 Retained Earnings 11,400
Total Owners' equity 29,000
Total Assets Rs. 43,500 Total Liab. and Owners' Equity Rs.43,500

The following transactions occurred during April:

1. The company paid Rs. 2,100 of the accounts payable.
2. The company acquired Rs. 3,500 of merchandise inventory, paying 40% in cash and the
remainder on open account.
3. The utility bill of Rs. 600 for the month of April was paid.
4. The company received Rs. 2,200 from its credit customers.
5. Sales of merchandise inventory for the month of April totaled Rs. 12,900, of which Rs. 5,400
was paid in cash and the remaining amount was on open account. The cost of the merchandise
sold was Rs. 8,100.
6. The company paid Rs. 1,600 of the note payable.
7. Depreciation on the store equipment was Rs. 600 for the month.
8. Additional store equipment of Rs. 1,700 was acquired. Of this amount, Rs. 700 was paid in
cash and the remainder was added to the note payable balance.
9. The balance in the prepaid rent account represented 3 months' worth of rent paid in advance
as of March 31, 20X9.
10. Net income for the month ended April, 20X9, was Rs. 2,500.
Required:
Prepare an analysis of the above transactions using the balance sheet equation. Prepare a
balance sheet dated April 30, 20X9.

12) Determine the missing values.

Revenues Rs. 250
Expenses 200
Dividends Declared 20
Additional investments by owners A
Net income B
Retained Earnings, Beginning C
Retained Earnings, Ending 110
Paid-in Capital, Beginning 60
Paid-in Capital, Ending 60
Total Assets, Beginning D
Total Assets, Ending 250
Total Liabilities, Beginning 95
Total Liabilities, Ending E

13) Prepare the necessary journal entries for each of the following transactions for Klokel, Inc.
a. Klokel, Inc. sold 1,200 shares of common stock at Rs. 30 per share in cash.
b. The company purchased equipment for Rs. 14,000, paying Rs. 4,000 in cash and the
remainder in a note.
c. The company paid the current month's rent, which amounted to Rs. 900, and the current
month's utilities, which amounted to Rs. 400.
d. Merchandise inventory costing Rs. 1,900 was sold on account for Rs. 4,100.
e. Depreciation on the equipment amounted to Rs. 600.

14) Prepare the journal entries for each of the six transactions depicted in the following T-
accounts, along with a brief explanation as to the nature of the transaction.

Cash Prepaid Rent Sales

--------------- --------------- -------------
(1) 11,000| 350 (2) (2) 350| |1,600 (4)
(5) 400|450 (6) |

Accounts Receivable Accounts Payable Cost of Goods Sold

----------------- ------------- ----------------
(4) 1,600|400 (5) | 2,800 (3) (4) 1,100|
| | |
 Merchandise
Inventory Paid-In Capital Wage Expense
---------------- --------------- ----------------
(3) 2,800|1,100 (4) |11,000 (1) (6) (450) |
| | |

15) Selected accounts from Taylor Company as of March 31, 2012, follow:

Cash Rs. 5,300

Inventory 10,250
Prepaid rent 100
Plant 40,500
Accumulated depreciation, plant 10,000
Accounts payable 6,300
Paid in capital 20,000
Retained earnings ?

In addition, the following transactions occurred in the month of March.

1. Depreciation for the month amounted to Rs. 700
2. Purchased inventory on account for Rs. 3,000
3. Returned a portion of the inventory deemed defective for Rs. 200
4. Paid creditors Rs. 2,200 for inventory purchased in #2
5. Paid 6 months' rent of Rs. 600 in advance, covering April 1, 2012 through September 30,
2012. The contract price did not increase from the previous 6 months' period and covered
October 1, 2011 through March 31, 2012
6. Sold inventory for Rs. 4,100 cash that cost Taylor Company Rs. 2,600

Required:
1. Journalize the transactions for Taylor Company.
2. Prepare an analysis of the transactions using the balance sheet equation.
3. Prepare an income statement for the month ending March 31.
4. Prepare a balance sheet at March 31.

16) Given the following account balances for Felay's Second Hand Shop on December 31, 2012,
prepare a trial balance.

Accounts Payable Rs. 15,000

Sales 93,000
Merchandise Inventory 32,000
Accum. Depreciation, Equipment 3,000
Supplies 2,000
Paid-in Capital 32,000
Cost of Goods Sold 38,000
Retained Earnings 20,000
Wages Payable 8,000
Cash 26,000
Wage Expense 29,000
Rent Expense 17,000
Equipment 27,000

17) Given the following account balances for Nelson Communications, prepare a trial balance
for March 31, 2012.

Wage Expense 19,000

Paid-in Capital Rs. 51,000
Cost of Goods Sold 21,000
Prepaid Rent 500
Wages Payable 2,000
Accounts Receivable 9,000
Sales 49,000
Equipment 64,000
Cash 6,000
Accounts Payable 8,000
Retained Earnings 17,500
Rent Expense 2,000
Merchandise Inventory 11,000
Accum. Depreciation, Equipment 5,000

18) Formation, Inc. had the following balances as of December 31, 2012. Prepare closing entries
based on these balances.

Equipment Rs. 26,000

Retained Earnings 7,000
Accumulated Depreciation Rs. 4,500
Paid-in Capital 21,400
Cost of Goods Sold 59,000
Supplies 4,300
Wages Payable 1,200
Sales 112,000
Cash 34,000
Accounts Payable 7,200
Wage Expense 36,000
Rent Expense 8,000
Merchandise Inventory 12,700
Dividends (Amount Declared) 3,000

19) Morrill Law Offices had the following transactions in November, 2012. Prepare closing
entries followed by an income statement for Morrill Law Offices for the month ending
November 30, 2012.
1. Morrill Law Offices sold Rs. 210,000 worth of services. Two-thirds was collected in November
with the remainder collected in December.
2. The company paid wages of Rs. 53,000 to its employees.
3. The company paid utilities of Rs. 750 to Brenton Electric Company.
4. The company's prepaid rent account expired in the month of November. Morrill Law Offices
purchased an additional 3 months of rent on October 1, 2012 for Rs. 3,600. The landlord did not
increase rent for Morrill Law Offices.
5. A declaration of dividends for Rs. 3,200 occurred on November 1, 2012.

20) Retall Company refinanced its long-term debt in 2012. It bought and retired common shares
of stock for cash of Rs. 20,000. The company spent Rs. 72,500 to retire long-term debt due in 3
years and issued Rs. 185,000 of 10-year bonds at par. Interest expense for 2012 was Rs. 21,000,
of which Rs. 17,000 was paid in cash; the other Rs. 4,000 was still payable at the end of the
year. Dividends declared and paid during the year were Rs. 12,500. Determine net cash flows
from financing activities.

21) The Statement of Cash Flows for Urban Athletic Company included the following items,
among others:
Dividends paid Rs. 31,000
Depreciation on equipment 19,500
Issued common stock 98,000
Paid off long-term note payable 23,000
Net income 29,540
Purchases of stock of other companies 8,000
Purchases of equipment 60,000

Prepare the cash flows from financing activities section of the statement of cash flows. All items
necessary for that section appear above, in addition to items that belong in the operating and
investing sections.

22) Telder Amusement Park issued common stock for Rs. 650,000 on January 1, 2012. The
company bought fixed assets for Rs. 435,000 cash and inventory for Rs. 50,000 cash. Later that
same year, the company sold fixed assets for Rs. 10,000 more than their book value of Rs.
65,000. Half of the inventory was sold for Rs. 98,350 during the year. On December 15, cash
was used to purchase Rs. 49,000 worth of Allen Food Services common stock, which Telder
regarded as a long-term investment.
Prepare the cash flows from investing activities of the statement of cash flows for Telder
Amusement Park.

23) Stepp Entertainment has the following selected balance sheet and income statement
information:

For the Year Ended

Income Statement Accounts December 31, 2012

Income Tax Expense Rs. 15,000

Cost of Goods Sold 164,000
Sales 523,000
Wage Expense 88,000

Balance Sheet Accounts At December 31, 2012 At December 31, 2011

Accounts Payable Rs. 19,000 Rs. 17,000
Cash 19,000 12,000
Income Taxes Payable 21,000 9,000
Accounts Receivable 41,000 36,000
Inventory 12,000 23,000
Wages Payable 5,000 12,000

Determine the following items for Stepp Entertainment for the year ended December 31, 2012:
a. Cash received from customers
b. Cash paid to suppliers
c. Cash paid for wages
d. Cash paid for income taxes

24) The following data pertains to Joss Decorating for the year of 2012:
a. Salaries and wages: accrued, Rs. 175,000; paid in cash Rs. 200,000.
b. Depreciation, Rs. 50,000.
c. Interest expense, all paid in cash, Rs. 12,500.
d. Other expenses, all paid in cash, Rs. 112,000.
e. Income taxes accrued, Rs. 35,000; income taxes paid in cash, Rs. 33,000.
f. Bought plant and facilities for Rs. 365,000 cash.
g. Sales of Rs. 1,500,000, all on credit. Cash collections from customers, Rs. 1,250,000.
h. The cost of items sold was Rs. 750,000. Purchases of inventory totaled Rs. 825,000; inventory
and accounts payable were affected accordingly.
i. Cash payments on trade accounts payable were Rs. 700,000.
j. Issued long-term debt for Rs. 110,000 cash.
k. Paid cash dividends of Rs. 45,000.
Prepare a statement of cash flows using the direct method for reporting cash flows from
operating activities.
25) In 2012, Jaycox Custom Bikes had net income of Rs. 575,000. Jaycox also recorded Rs.
215,000 in depreciation. The company also had the following changes in its balance sheet
accounts.
Accounts Receivable Rs. 26,000 increase
Inventories 11,000 decrease
Accounts Payable 19,000 decrease

Compute the net cash provided by operating activities using the indirect method.

26) Bearington Motors

Income Statement
For the Year Ended December 31, 2012

Sales Rs. 624,000

Less Expenses:
Cost of Goods Sold Rs. 332,000
Wage Expense 211,000
Depreciation Expense 20,000
Rent Expense 18,000
Income Tax Expense 16,000 597,000
Net Income Rs. 27,000

Bearington Motors
Balance Sheet
December 31, 2011 and 2012

12/31/12 12/31/11 12/31/12 12/31/11

Current Assets: Current Liabilities:
Cash Rs. 8,100 10,600 Accounts Payable Rs. 57,200 Rs. 59,900
Accts. Rec. 66,100 53,400 Wages Payable 17,500 11,300
Inventory 27,700 35,900 Taxes Payable 7,100 8,200
Prepaid Rent 3,000 4,500 81,800 79,400
104,900 104,400 Owners' Equity:
Long-term Assets: Common Stock 75,000 74,000
Fixed Assets 165,500 147,700 Retained Earnings 44,800 43,500
Acc. Depreciation (68,800) (55,200) 119,800 117,500
96,700 92,500 Total Liabilities
Total Assets Rs. 201,600 Rs. 196,900 & Owners' Equity Rs. 201,600 Rs. 196,900

Determine the net cash flow from operations for Bearington Motors, assuming the company
uses the indirect method.
27) The following financial statements are available for Jerry Company:

Comparative Income Statements

For the Years Ending December 31, 2X13 and 2X12
2X13 2X12
Sales(all credit) Rs.7500 Rs.6900
Cost of Goods Sold 4400 4000
Gross Profit Rs.3100 Rs.2900
Less: Operating Expenses 2200 2050
Operating Income Rs. 900 Rs. 850
Less: Income Tax Expense 400 370
Net Income Rs. 500 Rs. 480

Comparative Balance Sheets

December 31, 2X13 and 2X12
2X13 2X12 2X13 2X12
Current Assets: Current Liabilities:
Cash Rs. 200 Rs. 150 Accounts Payable Rs. 240 Rs. 200
Accounts Receivable 450 370 Taxes Payable 110 150
Inventory 600 700 Note Payable 70 180
Total Current Assets Rs.1250 Rs.1220 Total Current Liab. Rs. 420 Rs. 530
Long-Term Assets: Long-Term Liabilities 800 300
Equipment Rs.2900 Rs.2000 Total Liabilities Rs.1220 Rs. 830
Less: Accum. Depr. (1600) (1400) Stockholders' Equity:
Total Long-Term Assets Rs.1300 Rs. 600 Common Stock Rs. 400 Rs. 400
Retained Earnings 930 590
Total Stockholders' Equity Rs.1330 Rs. 990
Total Liab. &
Total Assets Rs.2550 Rs.1820 Stockholders' Equity Rs.2550 Rs.1820

Use the above information to determine the following ratios for 2X13:
a. Quick ratio
b. Average collection period in days
c. Total-debt-to-total-equity
d. Pretax return on assets (ROA)
e. Return on common stockholder's equity (ROE)

28) Based on the information for the following three companies, a) compute the number of
days' sales in receivables for 2X13 for each company assuming 365 days in a year and b) analyze
each company in accordance with a 45-day credit policy.

Hadman Teltor Comdok

Net credit sales 2X13 Rs.122,000 Rs.98,000 Rs.178,000
2X12 120,000 99,000 169,000
Cost of goods sold 2X13 54,000 44,000 78,000
2X12 51,000 39,000 61,000
Accounts receivable 2X13 14,000 21,000 19,000
(ending balance) 2X12 16,000 18,000 13,000
Inventory 2X13 26,000 19,000 9,000
(ending balance) 2X12 20,000 20,000 13,000

29) Based on the information for the following three companies, a) compute the accounts
receivable turnover ratio for each company for 2X13 and b) determine which company is in the
best liquidity position based on the calculation in part a.

Hadman Teltor Comdok

Net credit sales 2X13 Rs.110,000 Rs.120,000 Rs.200,000
2X12 120,000 99,000 169,000
Cost of goods sold 2X13 54,000 44,000 78,000
2X12 51,000 39,000 61,000
Accounts receivable 2X13 14,000 21,000 19,000
(ending balance) 2X12 16,000 18,000 13,000
Inventory 2X13 26,000 19,000 9,000
(ending balance) 2X12 20,000 20,000 13,000

30) The following table describes certain financial results for three companies during 2X11,
2X12 and 2X13:

Income Before Interest and Taxes

2X11 Standard, Inc. Rs.50,000
Platinum, Inc. 50,000
Gold, Inc. 50,000
Income Before Interest and Taxes
2X12 Standard, Inc. Rs.30,000
Platinum, Inc. 30,000
Gold, Inc. 30,000
Income Before Interest and Taxes
2X13 Standard, Inc. Rs.15,000
Platinum, Inc. 15,000
Gold, Inc. 15,000

Each company has total assets of Rs.250,000 in each year. Standard, Inc., has no debt, Platinum,
Inc., has Rs.100,000 of debt at an interest rate of 10%, and Gold, Inc., has Rs.150,000 of debt at
a 14% interest rate. Platinum and Gold have no other debt or liabilities. Assume no taxes.

a. For each company, and for each year, determine

1. the rate of return on total assets, and
2. the rate of return on common stockholders' equity.

b. For each company, and for each year, state whether the company's use of debt leverage is
favorable, unfavorable, or not applicable.
31) Delta Company acquired land and a building on March 1, 20X3, paying a total of
Rs.1,400,000. Separately, the land had an estimated fair market value of Rs.750,000 and the
building had an estimated fair market value of Rs.1,125,000. In order to use the property, land
improvements of Rs.20,000 were incurred. Additionally, the building needed to be rewired, at a
cost of Rs.65,000. Also, certain walls had to be knocked down, while others were constructed.
The cost to remove and replace walls was Rs.80,000. The company took occupancy of the
building on August 1, 20X3.
For all of items noted above, determine how much will be incorporated into the land account,
the building account, or expensed as of Delta Company's year end of December 31, 20X3.

32) Key Company purchased land for Rs.350,000 with intentions to construct an office building
on the site. At the time of the closing, Key Company paid closing costs of Rs.5,000, title fees of
Rs.800, and attorney's fees of Rs.3,200. When Key Company purchased the land, removal of an
old building was completed in preparation for the new building at a cost of Rs.8,000. However,
Key Company was able to sell a portion of the building materials retrieved from the old,
demolished building to a local contractor for Rs.2,000. After Rs.21,000 was paid to grade the
property, a building was constructed at a total cost of Rs.600,000.
Required:
Based on the previous information, identify the total acquisition costs for the land and the
building.

33) Hartman Manufacturing acquired a vehicle on January 1, 20X2, for Rs.78,000. The machine
is estimated to have a 6-year life, with a residual value of Rs.6,000. Hartman Manufacturing is
not certain whether to use the straight-line or double-declining-balance method of
depreciation.
Prepare the following depreciation schedule:

Straight-Line Double-Declining-Balance
Depreciation Book Depreciation Book
Date Expense Value Expense Value
01/01/2X02 Rs.78,000 Rs.78,000
12/31/2X02
12/31/20X3
12/31/20X4
12/31/20X5
12/31/20X6
12/31/20X7

34) MLJ Manufacturing has prepared the following depreciation schedule:

Straight-line depreciation schedule of snow blowers

Annual depreciation Book value

Rs.85,000
Year 1 Rs.21,250 63,750
Year 2 21,250 42,500
Year 3 21,250 21,250
Year 4 21,250 0

Suppose at the beginning of year 3, MLJ Manufacturing no longer believes the snow blowers
will last 4 years, but instead decides the snow blowers will last 6 total years. Assume the
residual value of the snow blowers is Rs.0.
Required:
1) What is the new depreciation expense for Year 3 and Year 4?
2) What is the new book value after Year 4 records depreciation expense?
3) What is the accumulated depreciation amount after Year 6 records depreciation expense?

35) Tullot Industries began operations on January 1, 20X9. On that date, the owners invested
Rs.140,000 in the company, and acquired a Rs.90,000 machine. The machine has a useful life of
5 years, and a residual value of Rs.4,000. The company intends to depreciate the machine on a
straight-line basis for financial reporting purposes. During 20X9, revenues, which were all in
cash, totaled Rs.630,000. All operating expenses, other than depreciation and all paid in cash,
were Rs.510,000. Tullot Industries has a 45% income tax rate.
Given the above information, determine the following (round all answers to the nearest dollar):
a. 20X9 Net income using straight-line depreciation
b. 20X9 Net cash provided by operations using straight-line depreciation