Module 4 Assignment: Advanced Asset Accounting

For this assignment, you will apply the concepts learned in Module 4 to various types of assets, including Property, Plant, and Equipment (PP&E), intangible assets, and investments in securities. You will perform calculations, journal entries, and analysis to demonstrate your understanding of these topics. You can continue using the accounting simulator from our website, MS Excel, or an inexpensive accounting software if you have access to it.

Assignment Tasks

1. Property, Plant, and Equipment (PP&E):
   • Using the data provided, calculate the capitalized cost of acquiring machinery. The following costs are incurred:
     • Purchase Price: $75,000
     • Shipping and Handling: $2,500
     • Installation: $3,500
     • Site Preparation: $1,500
   • Prepare journal entries for the acquisition of the machinery.
   • Using the straight-line method, calculate the annual depreciation expense if the useful life of the machinery is 10 years with a residual value of $5,000. Provide the journal entry for the first year’s depreciation.
2. Intangible Assets:
   • Assume your company acquires a patent for $120,000 with a useful life of 10 years. Prepare journal entries for the acquisition of the patent and its annual amortization.
   • Perform an impairment test for the patent at the end of the third year. Assume the carrying amount is $84,000 and the recoverable amount is $70,000. Prepare the necessary journal entry to record the impairment loss.
3. Investment in Securities:
   • Your company invests $50,000 in equity securities, acquiring a 15% ownership interest. Prepare the journal entry for the initial investment using the cost method.
   • After one year, your company receives $2,000 in dividends from the investee. Prepare the journal entry for the dividend received.
   • The fair value of the investment at year-end is $55,000. Prepare the journal entry to adjust the investment to its fair value.

Submission Instructions

Compile your calculations, journal entries, and analysis into a single document. Submit your document in PDF format via the course submission portal.

Additional Activities

• Discussion Post: Share your experience in the course forum, detailing any challenges you faced during the assignment and how you overcame them. Provide feedback on your classmates’ posts.
• Peer Review: Review at least two of your classmates’ submissions and provide constructive feedback. Focus on the accuracy of the calculations and the clarity of the journal entries.

Due Date: One week after completing this module.

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