Precision Construction entered into the following transactions during a recent year. January 2 Purchased a bulldozer…

Precision Construction entered into the following transactions
during a recent year.

January

2

Purchased a bulldozer for $290,000 by paying $40,000 cash and
signing a $250,000 note due in five years.

January

3

Replaced the steel tracks on the bulldozer at a cost of
$40,000, purchased on account. The new steel tracks increase the
bulldozer’s operating efficiency.

January

30

Wrote a check for the amount owed on account for the work
completed on January 3.

February

1

Repaired the leather seat on the bulldozer and wrote a check
for the full $2,800 cost.

March

1

Paid $15,600 cash for the rights to use computer software for a
two-year period.

1-b. Prepare the journal entries for each of
the above transactions.

2. For the tangible and intangible assets
acquired in the preceding transactions, determine the amount of
depreciation and amortization that Precision Construction should
report for the quarter ended March 31. The equipment is depreciated
using the double-declining-balance method with a useful life of
five years and $60,000 residual value.

3. Prepare a journal entry to record the
depreciation and amortization calculated in requirement 2.

Req. 2
For the tangible and intangible assets acquired in the preceding
transactions, determine the amount of depreciation and amortization
that Precision Construction should report for the quarter ended
March 31. The equipment is depreciated using the
double-declining-balance method with a useful life of five years
and $60,000 residual value. (Do not round intermediate
calculations.)

Partial Year

Depreciation-Equipment

Amortization-Licensing
Rights

Req. 3 : Prepare a journal entry to record the depreciation and
amortization calculated in requirement 2. (If no entry is required
for a transaction/event, select “No Journal Entry Required” in the
first account field.)