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  3. redlands inc made the following investments on january 2 2012...

Question: redlands inc made the following investments on january 2 2012...

Question details

Redlands, Inc. made the following investments on January 2, 2012, its first year of business:

Item

Cost

Residual Value

Expected Life

Cost Allocation

Warehouse

$120

$20

25 years

Straight-line

Machine

60

10

10 years

Double-declining

Photocopier

75

5

7,000 copies

Productive output

Patent

20

0

10 years

Straight-line

Trademark

10

0

Indefinite

Not applicable

Required (A):
Record the adjusting journal entries on December 31, 2012. Redlands made 2,000 copies in 2012.
Present the depreciation and amortization expenses on the 2012 income statements.
Report the book values of the long-term assets on the December 31, 2012 balance sheet.

On January 2, 2013, Redlands,
Sold its warehouse for $111.
Sold the machine for $52.
Estimated the patent would only have value for a total of 7 years (expires on 12/31/18).

Required (B):
Compute the gain or loss on the sale of the warehouse.
Compute the gain or loss on the sale of the machine.
Present the depreciation and amortization expenses for the photocopier and patent on the 2013 income statements. Redlands made 3,000 copies in 2013.
Report the book values of the photocopier, patent, and trademark on the December 31, 2013 balance sheet.

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