1 10. Lawrence Pipeline Company purchased 300 barrels of oil from Stout OilCompany. The gross value of the oil was $30,000. The severance tax rate is 5%.Give the journal entry to record revenue and severance taxes for Stout, assumingLawrence disbursed the royalty and remitted all taxes, and assuming a divisionorder as follows:Stout Oil Company: Interest 0.75Royalty Owner: Interest 0.25

The state tax which is imposed on the extraction of non-renewable natural resources for use in other…

Answered: 10. Lawrence Pipeline Company purchased…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5EB: Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of...

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Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.
WWD Oil Company sells 10,000 bbl of oil for $70 per barrel. The lease provides for a 1/6 Royalty interest, and the Working interest owner has distributed an Overriding Royalty interest of 25%. The severance tax rate is 6%. Record the entries of RI owner, the ORI owner and the WI owner, assuming WWD Oil assumes responsibility for distributing the taxes and royalty income.
A piece of equipment purchased at a cost $250,000 generated new income of $80,000 per year, witha annual operating costs of $10,000. The equipment was depreciated using MACRS method as 7-year property. At the end of five years, the management decided to sell the equipment for a modest price of $75,000. The company pays taxes at an effective tax rate of 23%. Which of the following was closest to the amount of taxes the company paid in year 5? $15,000 $8,000 $33,000 $11,000
Daly Publishing Corporation recently purchased a truck for $30,000. Under MACRS, the first year’s depreciation was $6,000. The truck driver’s salary in the first year of operation was $32,000. The company’s tax rate is 30 percent. Required: 1-a. Calculate the after-tax cash outflow for the acquisition cost and the salary expense. 1-b. Calculate the reduced cash outflow for taxes in the first year due to the depreciation.
Firm OCS sold business equipment with a $23,000 initial cost basis and $10,015accumulated tax depreciation. In each of the following cases, compute OCS’srecaptured ordinary income and Section 1231 gain or loss on the sale.Required:a. Amount realized was $10,600.b. Amount realized was $13,600.c. Amount realized was $18,100.d. Amount realized was $26,100.Note: For all requirements, losses should be indicated with a minus sign. Leave nocell blank. Enter "0" for cells that do not have an amount.
Firm OCS sold business equipment with a $20,000 initial cost basis and $7,315accumulated tax depreciation. In each of the following cases, compute OCS’srecaptured ordinary income and Section 1231 gain or loss on the sale.Required:a. Amount realized was $10,000.b. Amount realized was $13,000.c. Amount realized was $17,500.d. Amount realized was $22,500
A corporation sold a piece of equipment during the current tax year for $78,600. The accounting records show that its cost basis, B, is $190,000 and the accumulated depreciation is $139,200. Assume that the effective income tax rate as a decimal is 0.40 (40%). Based on this information, Solve, what is (a) the gain (loss) on disposal, (b) the tax liability (or credit) resulting from this sale, (c) the tax liability (or credit) if the accumulated depreciation was $92,400 instead of $139,200 ?
On June 30, Bridgeport Corp. discontinued its operations in Mexico. During the year, the operating income was $204,000 before taxes. On September 1, Bridgeport disposed of the Mexico facility at a pretax loss of $672,000. The applicable tax rate is 30%. Show the Income from operations of Mexican Facility section of Bridgeport's income statement.
A firm purchased equipment at a total cost of $287,000, which was depreciated straight - line over seven years. After five years, the equipment was sold for $98,900. What is the ATCF at a tax rate of 34 percent? Multiple choice question. $93, 154 $76,227 $84,315 $110,054
Venus Ltd has acquired machinery worth of Rs. 1000 million. The company provides 10% depreciation under straight-line-method of depreciation for preparing Income Statement. For computing tax, it provides 15% depreciation under Written-down-value (WDV) method. If tax rate is 30%, the deferred tax amount in the first year is equal to: Rs. 15 million Rs. 45 million Rs. 50 million Rs. 30 million
Delta Company manufactures drills and sells them to distributors. In its first year of operations, Delta manufactured 10,000 drills and incurred $50,000 in direct material costs and $80,000 in direct labor costs. In addition, Delta capitalized $30,000 indirect costs for books and $65,000 for tax under UNICAP. At the end of the year, Delta had 4,200 drills on hand. Compute Delta's CGS for tax purposes.
Watson Tax Planning Service has the following plant assets: Communications Equipment: Cost, $6,960 with useful life of eight years; Furniture: Cost, $18,000 with useful life of 12 years; and Computer: Cost, $12,400 with useful life of four years. (Assume residual value of all the assets is zero.) Watson's monthly depreciation expense calculated using the straightline method is ________. (Round any intermediate calculations to two decimal places, and your final answer to the nearest cent.) A. $258.33 B. $72.50 C. $125.00 D. $455.83

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