3. Donated Assets Brandon's Animal Rescue purchased a green energy system for their animal shelter/hospital. The equipment cost a total of $199,000 , has an estimated life of 40 years, and zero residual value. The provincial government has offered incentives for converting to green energy, and the grant will cover 67% of the asset cost. Brandon's Animal Rescue purchased the equipment on April 15, 2021 and they received the grant onMay 20, 2021. Brandon's Animal Rescue accounts for government grants using the deferral method.Prepare the journal entries for the two transactions above. Chapter 10 Homework1. Asset PurchasePenny's Brilliant Bakery makes all sorts of breads for sale to the public. Business is booming and Penny is lookingto expand the operation. She has purchased a new state-of-the art rotary oven in which she can bake 100$196,000loaves of bread at a time. Oona purchased the oven on November 1, 2021 from Rick's Appliances forwith terms of 2/10, n/30. The oven was delivered on November 3, 2021, and that same day Penny paid the freightbill of$4,936 . Penny hired an electrician to hook up the oven, which cost her$5,235which she paid infull on November 5, 2021. The new oven looked so sparkly, that Penny decided to pay a cleaning companyto do a deep clean on the front and back of all her other appliances to make them just as brilliant. Thiscost her $1,367which she paid on November 10, 2021. Finally, Penny paid Rick's Appliances the amount sheowed to them on November 11, 2021.Prepare all the journal entries for November as described above. Penny uses the gross method for discounts.2. Replacement PartsEvan's Greenhouses paid $58,000 to replace the cooling/heating system in 10 of his 40 greenhouses. Theoriginal cooling/heating systems were capitalized as part of the greenhouses when they were purchased5 years ago, and they were not considered a separate component. When purchased, the greenhouseswere depreciated using straight line depreciation with an assumption of a 20 year life and no residual value.Evan estimated that the original cost of the cooling/heating system would have been 30% cheaper than theycost on the day they were replaced (due to inflation).Prepare the journal entry for this transaction, assuming Evan uses the cost method.3. Donated AssetsBrandon's Animal Rescue purchased a green energy system for their animal shelter/hospital. The equipment, has an estimated life of 40 years, and zero residual value. The provincialcost a total of$199,000government has offered incentives for converting to green energy, and the grant will cover67% of the assetcost. Brandon's Animal Rescue purchased the equipment on April 15, 2021 and they received the grant onMay 20, 2021. Brandon's Animal Rescue accounts for government grants using the deferral method.Prepare the journal entries for the two transactions above.

Journal entries are records of business transactions of the business with the help of the…

Answered: 3. Donated Assets Brandon's Animal…

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 29P