文档介绍：Intermediate Accounting Principles and Analysis, 2nd Edition
Exercises69liability for damages resulting from 4>the situation. Nevertheless,pany decides to make the from Lawsuit500,000Liability for Lawsuit500,000(d)Because the general level 3>of prices increased during the current year,Fresh Horses,Inc. determined that therewas a $16,000 understatement of depreciation expense on its equipment and decided to record it in its ac-counts. The following entry was Expense16,umulated Depreciation16,000(e)Fresh Horses,Inc. has been concerned about whether intangible assets could generate cash in case of liqui-dation. As a consequence,goodwill arising from a purchase transaction during the current year and recordedat $800,000 was written off as Earnings800,000Goodwill800,000(f)Because of a “fire sale,”equipment obviously worth $200,000 was acquired at a cost of $155,000. The fol-lowing entry was ,000Cash155,000Revenue45,000E2-11(Accounting prehensive)Presented below is information related to Garth(LO 7)Brooks, on the appropriateness of the accounting procedures followed by Garth Brooks,Inc.(a)Depreciation expense on the building for the year was $60,000. Because the building was increasing in valueduring the year,the controller decided to charge the depreciation expense to retained earnings instead of e. The following entry was Earnings60,umulated Depreciation—Buildings60,000(b)Materials were purchased on January 1,2008,for $120,000 and this amount was entered in the ount. On December 31,2008,the materials would have cost $141,000,so the following entry was ,000Gain on Inventories21,000(c)During the year,pany purchased equipment through the issuance mon stock. The stock hada par value of $135,000 and a fair market value of $450,000. The fair market value of the equipment wasnot easily determinable. pany recorded this transaction as ,mon Stock