Reference no: EM132325843

Question

1. On January 1, 2009, Rra's Sporting Goods purchased store fixtures at a cost of $180,000. The anticipated service life was 10 years with no residual value. Rra's has been using the double-declining balance method, but in 2011 adopted the straight-line method because the company believes it provides a better measure of income. Rra's has a December 31 year-end. The journal entry to record depreciation for 2011 is ?

2. Hollywood Ltd. purchased equipment on 1/1/09 for $800,000, estimating a five-year useful life and no residual value. In 2009 and 2010, Hollywood depreciated the asset using the straight-line method. In 2011, Hollywood changed to sum-of-years'-digits depreciation for this equipment. What depreciation would Hollywood record for the year 2011 on this equipment?

3. On January 1, 2018, Mites, Inc., acquired land for $6.2 million. Mites paid $1.2 in cash and signed a 6% note requiring the company to pay the remaining $5 million plus interest on December 31, 2019. An interest rate of 6% properly reflects the time value of money for this type of loan agreement. For what amount should Mites record the purchase of land?