AC 302 CHAPTER 10 QUESTION 3

AC 302 CHAPTER 10 QUESTION 3
Name				Date		
Instructor			Course		
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield						
Primer on Using Excel in Accounting by Rex A Schildhouse						
						
E10-3 (Acquisition Costs of Trucks) Shabbona Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2012. The terms of acquisition for each truck are described below.						
						
						
1. Truck #1 has a list price of		$15,000 	and is acquired for a cash payment of			$13,900 
2. Truck #2 has a list price of		$20,000 	and is acquired for a down payment of			$2,000 
cash and a zero-interest bearing note with a face amount of					$18,000 	The note is due
April 1, 2013, Shabbona would normally have to pay interest at a rate of					10%	for such a
borrowing, and the dealership has an incremental borrowing rate of					8%	
3. Truck #3 has a list price of		$16,000 	It is acquired in exchange for a computer system that			
Shabbona carries in inventory. The computer system costs				$12,000 	and normally sold by	
Shabbona for	$15,200 	Shabbona uses perpetual inventory system.				
4. Truck #4 has a list price of		$14,000 	It is acquired in exchange for			1,000 
shares of common stock in Shabbona Corporation. The stock has a par value per share of						
$10 	and a market value of		$13 	per share.		
						
Instructions:						
Prepare the appropriate journal entries for the foregoing transactions for Shabbona Corporation.						
						
1	Account Title				Amount	
	Account Title					Amount
						
2	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
	"Hint: Use the Excel Present Value formula.
        Cells are formatted to show to 2 decimal places."					
						
						
3	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
						
						
						
						
						
						
4	Account title				Amount	
	Account title					Amount
	Account title					Amount
						
						
Note: Due to significant digits with worksheets, calculators, and tables, minor differences may occur.