Submission Assignment

 Submission Assignment

At the beginning of the year, Jimmy Jones Company purchased a quilting machine for $35,000. The following expenditures were incurred:

• Freight = $1,200
• Installation = $1,200
• Property tax on the machine for the first year = $750

The machine is estimated to have a useful life of 7 years and a residual value of $2,500.

Consider the following items (each item stands alone):

• What is the initial cost of the machine? Provide the journal entry.
• If Jimmy Jones Company decides to use straight-line depreciation, what is the depreciation for year 1 and year 2? Provide the journal entry for each year.
• If Jimmy Jones Company decides to use double declining for depreciation, what is the depreciation for year 1 and year 2? Provide the journal entry for each year.
• If Jimmy Jones Company decides to use the sum of the year’s digits for depreciation, what is the depreciation for year 1 and year 2? Provide the journal entry for each year.
• Assume that at the end of year 3 (before recording the annual depreciation), Jimmy Jones Company changes the useful life from 7 years to 10 years. Provide the journal entry for year 3 annual depreciation. Assume straight-line depreciation.
• Assume that on July 1 of year 5, Jimmy Jones Company sells the quilting machine for $16,250. Provide the journal entry to record the sale of the machine. Assume straight-line depreciation.
• Assume that at the end of year 4, it has been determined that the quilting machine is impaired. Under impairment, the quilting machine is now worth $2,000. Provide the journal entry to record the impairment loss. Assume straight-line depreciation.

After preparing the entries for the above transactions in an Excel spreadsheet (with calculations), draft a 2-page memo to the chief financial officer (CFO) on areas of concern related to tangible assets and recommendations to mitigate areas of concern in future transactions.

Submitting your assignment in APA format means, at a minimum, that you will need the following:

• Title page: Remember the running head. The title should be in all capitals.
• Length: Journal entries and 2-page memo
• Abstract: This is a summary of your paper, not an introduction. Begin writing in third person.
• Body: This begins on the page following the title page and abstract page and must be double-spaced (be careful not to triple- or quadruple-space between paragraphs). The typeface should be 12-pt. Times Roman or 12-pt. Courier in regular black type. Do not use color, bold type, or italics, except as required for APA-level headings and references. The deliverable length of the body of your paper for this assignment is 2 pages. In-body academic citations to support your decisions and analysis are required. A variety of academic sources is encouraged.
• Reference page: References that align with your in-body academic sources are listed on the final page of your paper. The references must be in APA format using appropriate spacing, hanging indent, italics, and uppercase and lowercase usage as appropriate for the type of resource used. Remember, the Reference page is not a bibliography but a further listing of the abbreviated in-body citations used in the paper. Every referenced item must have a corresponding in-body citation.