Exercise 7-12: Calculating Net Income over 5 Years with Given

School: Purdue University - Course: MGMT 2000 - Subject: Accounting

Exercise 7-12 (LO 7-4) Year 2024($18,000 - $2,000) =$3,200 x 9/12=$2,400 5 years 2025($18,000 - $2,000) = $3,200 5 yearsExercise 7-16 (LO 7-5) Requirement 1 January 1, 2024DebitCredit Patents237,000 Cash237,000 December 31, 2024 Amortization Expense39,500 Patents39,500 December 31, 2025 Amortization Expense39,500 Patents39,500 January, 2026 Patents57,000 Cash57,000 December 31, 2026 Amortization Expense*53,750 Patents53,750 *($237,000 - $39,500 - $39,500 + $57,000)/4 remaining years = $53,750 Requirement 2 Balance in the Patent account Patent 237,00039,500 57,00039,500

53,750 161,250 Exercise 7-17 (LO 7-6) Requirement 1 DebitCredit Cash21,600 Accumulated Depreciation23,400* Equipment42,000 Gain3,000 (Sell equipment for a gain) * ($42,000 - $3,000) / 5 = $7,800 per year x 3 years = $23,400 Requirement 2 DebitCredit Cash13,600 Accumulated Depreciation23,400 Loss5,000 Equipment42,000 (Sell equipment for a loss