Be advised, the template workbooks and worksheets are not protected.

Overtyping any data may remove it.

Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text.

You should enter your name, date, instructor's name, and course into the cells at the top of the page. This information will be printed
on the top of each page if the template requires more than one page.

Each template is set to print with File Name, Page # of # Page(s), the print date, and the print time to assist in assembly
of multiple pages.

If more than one page is required by the template, manual page breaks have been set to provide consistent
presentation.

All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the
text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the
appropriate cells.

In general, the highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account
title(s), values, memorandum appropriate to the entry, or text answers to questions.

And information or data which may be required by the solution will be entered in cells with borders to help identify them.

Where a highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that
Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01,
2012, in the format set in the template.

Where a highlighted cell shows "Acct Nbr" enter the appropriate account number, provided in the template and in the text for that step
of the challenge. This is entry may be a "Look to" formula to another cell where that information has been provided or previously
entered.

Where a highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry
and most of those cells are set for the proper indentation for that step. Frequently the chart of accounts appropriate to the challenge is
provided and you can use the "look to" formula to reference the appropriate account title without typing it.

Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for
Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be
acceptable.

Where a highlighted cell shows titles such as "Values," "Amounts," or "Quantities" enter the appropriate numerical value for that step
of the challenge. The cell is formatted for proper presentation of the entered information. If a dollar sign is appropriate, it should not
be entered, Microsoft Excel will place it there through formatting. Commas and significant digits (decimals) are also set through
formatting for common presentation. Since the formatting of the templates is not protected by any password, you may change any of
the formatting found in the templates to meet your desires.

Where a highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate
for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with
borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference,
"=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial
text provided for Microsoft Excel.
Where a highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate
for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with
borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference,
"=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial
text provided for Microsoft Excel.

Where a highlighted cell shows "Text" enter the appropriate text for that step of the challenge. This may be a memorandum entry for a
journal entry or a lengthy text answer discussing the results of an analysis of a company's financials. These titles can simply be typed
over.

Where a highlighted cell shows titles such as "Journal Number" or "Journ #" you should enter the appropriate number provided in the
template and in the text for that step of the challenge. In general this will appear in instances such as "Record the following events in
General Journal number six."

The print area is defined to fit onto 8 1/2" × 11" sheets in portrait or landscape mode as required. Margins are generally set to no less
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reformat the margins through Page Setup.

The display may have "Freeze Pane" invoked so column titles remain visible during data entry. This can be removed by utilizing the
View menu and selecting "Unfreeze Panes" under "Freeze Panes."

When negative values are required, enter them by starting with a minus sign, "-". Negative values may be shown as ($400) or -$400.
Negative values in formulas can be created by putting a minus sign in front of the cell reference - "=E10*-E11" will return a negative
value if both cells E10 and E11 contain positive values.
Name: Date: 08/19/16
Instructor: Course: AC3150
Intermediate Accounting, 15 Edition by Kieso, Weygandt, and Warfield
th

E22-9 (Error and Change in Estimate—Depreciation) Joy Cunningham Co. purchased a machine on
January 1, 2012, for $550,000 At that time it was estimated that the machine would
have a 10 -year life and no salvage value. On December 31, 2015, the firm’s
accountant found that the entry for depreciation expense had been omitted in 2013. In addition,
management has informed the accountant that the company plans to switch to straight-line depreciation,
starting with the year 2015. At present, the company uses the sum-of-the-years’-digits method for
depreciating equipment.

Instructions:
Prepare the general journal entries that should be made at December 31, 2015, to record these events.
(Ignore tax effects.)

Dec 31, 15 Retained Earnings 90,000

Accumulated Depreciation-Machinery 90,000
To correct for the omission of depreciation expense in 2013

Cost of Machine $550,000

Less: Depreciation prior to 2015
Sum-of-the-years’-digits depreciation
2012 [550000*(10/55)] $100,000
2013 [550000*(9/55)] 90,000
2014 [550000*(8/55)] 80,000 270,000
Book Value at January 1, 2015 $280,000
7
Depreciation for 2015: $40,000

Dec 31, 15 Depreciation Expense 40,000

Accumulated Depreciation - Equipment 40,000
To record depreciation expense for 2015

518840477.xlsx, Exercise 22-9, Page 3 of 8, 04/15/2021, 19:53:08

Name: Date: 08/16/16
Instructor: Course: AC3150
Intermediate Accounting, 15 Edition by Kieso, Weygandt, and Warfield
th

E22-11 (Change in Estimate—Depreciation) Peter M. Dell Co. purchased equipment for $510,000
which was estimated to have a useful life of 10 years with a salvage value of
$10,000 at the end of that time. Depreciation has been entered for 7
years on a straight-line basis. In 2015, it is determined that the total estimated life should be
15 years with a salvage value of $5,000 at the end of that time.

Instructions:
(a) Prepare the entry (if any) to correct the prior years' depreciation.

No entry is necessary

(b) Prepare the entry to record depreciation for 2015.

Depreciation Expense 19,375

Accumulated Depreciation 19,375

Worksheet - Original cost $510,000

Accumulated depreciation (350,000)
Book Value 160,000
Estimated salvage value (5,000)
Depreciable basis 155,000
Remaining useful life 8
Depreciation Expense $19,375

518840477.xlsx, Exercise 22-11, Page 4 of 8, 04/15/2021, 19:53:08

Name: Date: 08/20/16
Instructor: Course: AC3150
Intermediate Accounting, 15 Edition by Kieso, Weygandt, and Warfield
th

P22-1 (Change in Estimate and Error Correction) Holtzman Company is in the process of preparing its
financial statements for 2014. Assume that no entries for depreciation have been recorded in 2014. The
following information related to depreciation of fixed assets is provided to you.
1. Holtzman purchased equipment on Jan 2, 2011, for $85,000 At the time, the equipment
had an estimated useful life of 10 years with a $5,000 salvage value. The equipment
is depreciated on a straight-line basis. On January 2, 2014, as a result of additional information, the
company determined that the equipment has a remaining useful life of 4 years with a
$3,000 salvage value.

2. During 2014, Holtzman changed from the double-declining balance method for its building to the
straight-line method. The building originally cost $300,000 It had a useful life of
10 years and a salvage value of $30,000 The following computations
present depreciation on both bases for 2012 and 2013.
2013 2012
Straight-line $27,000 $27,000
Declining balance $48,000 $60,000

3. Holtzman purchased a machine on July 1, 2012, at a cost of $120,000 The machine

has a salvage value of $16,000 and a useful life of 8 years.
Holtzman’s bookkeeper recorded straight-line depreciation in 2012 and 2013 but failed to consider the
salvage value.

Instructions:
(a) Prepare the journal entries to record depreciation expense for 2014 and correct any errors made
to date related to the information provided.

(1) Cost of equipment $85,000

Less: Salvage value 5,000
Depreciable cost $8,000

Depreciation to 2014
2011 $85,000 8,000 $77,000
2012 77,000 8,000 69,000
2013 69,000 8,000 61,000
$24,000

Depreciation in 2014
Cost of equipment $61,000
Less: Depreciation to 2014 24,000
Book value, January 1, 2014 37,000
Less: Salvage value 3,000
Depreciable cost $34,000

Remaining years 4
Depreciation in 2014 $8,500

Depreciation Expense 8,500

Accumulated Depreciation 8,500

518840477.xlsx, Problem 22-1, Page 5 of 8, 04/15/2021, 19:53:08

Name: Date: 08/20/16
Instructor: Course: AC3150
(2) Cost of building $300,000
Less: Depreciation to 2014
2012 60,000
2013 48,000
Book value, January 1, 2014 $192,000
Less: Salvage value 30,000
Depreciable cost $162,000

Remaining years 8
Depreciation in 2014 $20,250

Depreciation Expense 20,250

Accumulated Depreciation 20,250

(3) Depreciation expense 13,000

Accumulated Depreciation- Machinery 13,000

Accumulated Depreciation- Machinery 3,000

Retained Earnings 3,000

Depreciation recorded in 2012: [$120,000 ÷ 8 * (1/2)] $7,500

Depreciation that should be recorded in 2012:
[($120,000 – $16,000) ÷ 8 * (1/2)] 6,500
Depreciation recorded in 2013: ($120,000 / 8) 15,000
Depreciation that should be recorded in 2013:
[($120,000 – $16,000) ÷ 8] 13,000

Depreciation
Depreciation that should
taken be taken Differences
2012 $7,500 $6,500 $1,000
2013 15,000 13,000 2,000
$22,500 $19,500 $3,000

(b) Show comparative net income for 2013 and 2014. Income before depreciation expense was
$300,000 in 2014, and was $310,000 in 2013. Ignore taxes.

HOLTZMAN COMPANY
Comparative Income Statements
For the Years 2014 and 2013
2014 2013
Income before depreciation expense $300,000 $310,000
Depreciation Expense 41,750 69,500
Net income $258,250 $240,500

Depreciation Expense 2014 2013

Equipment $8,500 $8,500
Building 20,250 48,000
Machinery 13,000 13,000
$41,750 $69,500

518840477.xlsx, Problem 22-1, Page 6 of 8, 04/15/2021, 19:53:08

Name: Date: 08/20/16
Instructor: Course: AC3150
Intermediate Accounting, 15 Edition by Kieso, Weygandt, and Warfield
th

P22-6 (Accounting Change and Error Analysis) On December 31, 2014, before the books were closed,
the management and accountants of Madrasa Inc. made the following determinations about three
depreciable assets.
1. Equipment A was purchased January 2, 2011. It originally cost $540,000
and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally
expected to be useful for 10 years and have a zero salvage value. In 2014, the
decision was made to change the depreciation method from straight-line to sum-of-years'-digits, and
the estimates relating to useful life and salvage value remained unchanged.
2. Equipment B was purchased January 3, 2010. It originally cost $180,000
and, for depreciation purposes, the straight-line method was chosen. The asset was originally
expected to be useful for 15 years and have a zero salvage value. In 2014, the
decision was made to shorten the total life of this asset to 9 years and to
estimate the salvage value at $3,000
3. Equipment C was purchased January 5, 2010. The asset's original cost was $160,000
and this amount was entirely expensed in 2010. This particular asset has a 10-year useful life and no
salvage value. The straight-line method was chosen for depreciation purposes.

Additional data:
1. Income in 2014 before depreciation expense amount to $400,000
2. Depreciation expense on assets other than A, B, and C totaled $55,000 in 2014.
3. Income in 2015 was reported at $370,000
4. Ignore all income tax effects.
5. 100,000 shares of common stock were outstanding in 2011 and 2014.

Instructions:
(a) Prepare all necessary entries in 2014 to record these determinations.

(1) Depreciation Expense 94,500

Accumalated Depreciation 94,500

Computations:
Cost of Equipment $540,000
Less: Depreciation prior to 2014 162,000
Book value, January 1, 2014 $378,000

Depreciation factor 7/28

Depreciation for 2014 $94,500

(2) Depreciation Expense 25,800

Accumulated Depreciation 25,800
Computations:
Original cost $180,000
Less: Accumulated depreciation, 1/1/14 (48,000)
Book value, January 1, 2014 132,000
Estimated salvage value (3,000)
Remaining depreciable base $129,000

518840477.xlsx, Problem 22-6, Page 7 of 8, 04/15/2021, 19:53:08

Name: Date: 08/20/16
Instructor: Course: AC3150
Remaining useful life 5
Depreciation expense 2014 $25,800

(3) Equipment C 160,000

Accumulated Depreciation 64,000
Retained Earnings 96,000

Depreciation Expense 16,000

Accumulated Depreciation 16,000

(b) Prepare comparative retained earnings statements for Madrasa Inc. for 2013 and 2014. The
company had retained earnings of $200,000 at December 31, 2012.
MADRASA INC.
Comparative Retained Earnings Statements
For the Years Ended
2014 2013
Balance, January 1, as previously reported $200,000
Add: Error in recording equipment (Asset C) 112,000
Retained earnings, January 1, as adjusted 666,000 312,000
Add: Net income 208,700 354,000
Retained earnings, December 31 $874,700 $666,000

Amount expensed incorrectly in 2010 $160,000

Depreciation to be taken to January 1, 2013 (48,000)
Prior period adjustment for income 112,000

Income before depreciation expense 2014 400,000

Depreciation for 2012
Equipment (Asset A) $94,500
Equipment (Asset B) 25,800
Equipment (Asset C) 16,000
Other 55,000 (191,300)
Income after depreciation expense $208,700
Net income as reported $370,000
Depreciation - Asset C (16,000)
Net income as adjusted $354,000

518840477.xlsx, Problem 22-6, Page 8 of 8, 04/15/2021, 19:53:08