Formula Results Signed a 10-Year Lease for a Store in the Best

question 57

Essay

Formula Results signed a 10-year lease for a store in the best mall in the area.At the beginning of the seventh year of the lease,the company decided to refurbish the store.The following expenditures were made:
$$\begin{array} { l l l } \text { Item } & \underline { \text { Cost } } & \underline { \text { Useful } } \text { Life } \\\text { Carpeting } & \$ 6,000 & 3 \text { years } \\\text { Lighting Fixtures } & \$ 4,500 & 6 \text { years } \\\text { Wall Construction } & \$ 10,000 & \text { 8years }\end{array}$$ All items were paid in cash.There is no residual value for any of the items noted above.
a.Prepare the journal entry to record the expenditures of the above items.
b.Prepare the year-end adjustment to record the expense associated with the above items.

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Definitions:

T Value

A value derived from a T-distribution used in hypothesis testing and in generating confidence intervals.

Individual Parameter

A specific characteristic or measure of a statistical model or equation that applies to an individual case or entity.

SSR

Sum of Squares due to Regression, a measure used in statistical analysis to determine the variability explained by the regression model.