An asset was acquired on October 1, 2021, for $101,000 with an estimated five-year life and $21,000 residual value. The company uses units-of-production depreciation and expects the asset to produce 32,000 units. Calculate the gain or loss if the asset was sold on March 31, 2024, for $74,000. Actual production was: 2021 = 800 units; 2022 = 7,000 units; 2023 = 8,000 units; 2024 = 1,200 units. Multiple Choice $24,240 gain. $30,800 gain. $15,500 gain. $15,800 gain.
Q: Suppose a bank 's assets have an average duration of years, and its liabilities have an average…
A: Duration gap analysis basically analyse the sensitivity of the market value of the financial…
Q: Consider the financial ratios of ABK Bank and the average ratios of peer banks based on 2015…
A:
Q: The Engine Division provides motors for the Auto Division of a Company. The standard unit costs for…
A: Introduction:- Transfer pricing means to the prices of goods and services are exchanged between…
Q: Stefan Ceramics is in the business of selling ceramic vases. It has two departments - molding and…
A: Given direct labor charges =$1600
Q: p income statement for the year ended December 31, Year 1, concluding with earnings per share. In…
A: To find as, Multi step income statement Retained earnings statement Balance sheet
Q: 2) Prepare a trend analysis for the following Statement of Cash Flows. Round to nearest whole…
A: INTRODUCTION: The trend analysis is the method of analysing financial position of an organisation on…
Q: Budgets provide financial objectives to achieve. If actual operations results do not meet the…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: With a savings account, You earn the highest possible interest rate You are allowed an unlimited…
A: Saving accounts are the most commonly used bank accounts which provides interest and unrestricted…
Q: expect a share of EconNews.Com to sell for $65 a year from now. If you are willing to pay $65.74 for…
A: when calculating the dividend expected of a stuff it is important to consider the growth prospect of…
Q: An analysis of the accounts of Roberts Company reveals the following manufacturing cost data for the…
A: Amount (In $) Direct Materials Beginning Raw Materials Inventory…
Q: . A British company knows it will have to pay 6 million euros in six months to buy some iron. The…
A: A forward contract is a customized contract between two parties to buy or sell an asset at a…
Q: Managers use capital budgeting techniques to make which of the following two types of capital…
A: As per the guidelines, only one question is allowed to be solved so I am answering the first…
Q: A single taxpayer sold his home on March 4 of the current year for $600,000. He originally bought…
A: The taxpayers are also required to pay capital gains tax on the sale of residential property. The…
Q: 31. Apply the Retail Inventory Methedto calclate the ct of ending ievery Cot Retail Beginning…
A: Given:- Beginning inventory :- Cost - $20224.…
Q: Individuals Julie and Brandon form JB Corporation. Julie transfers cash of $425,000 in exchange for…
A: Given information, FMV of stock received =$410,000 Note received = $15,000 Adjusted basis of…
Q: explain and describe the various costing method in management accounting.outline their advantagesand…
A: Using product costing procedures, a cost is allocated to a product. The most frequent costing…
Q: Frank Corporation manufactures a single product that has a selling price of S30.00 per unit. Fixed…
A: Formula used: Units to be sold to earn a target profit = ( Fixed cost + target profit ) / Unit…
Q: decrease in the costs of using an ATM causes money demand to increase. Shifting the Money demand…
A: banks are the organization that help in the transactions by the customer and it has decrease the…
Q: A corporation has just paid dividend $1.000. If the dividend can grow 20% for the first three years…
A: Solution Concept Dividend discount model can be followed to get the price of the stock We need to…
Q: Which of the following elements are used in calculating Costs in a Flexible Budget? a. Budgeted…
A: The flexible budget performance report is prepared to compare the actual data with flexible Budget…
Q: Find the salvage value of an asset which has FC of P150 000 and economic life of 7 years. Using the…
A: Sum of years digits of useful life = 1 + 2 + 3 + 4 + 5 + 6 + 7 = 28 Remaining useful life on 5th…
Q: What information is made available about the business in the following financial statements: a.…
A: A compilation of summaries of a company's monetary results, financial position, and cash flows is…
Q: What information do we get from the income statement?
A: Income statement is a financial statement which is prepared on periodical basis along with Balance…
Q: How does accounting for foreign inflation differ from accounting for domestic inflation?
A: Inflation accounting is the process of adjusting financial accounts during inflationary periods. The…
Q: 30. A building previously occupied by Grand Company with a cost of P10 million and an accumulated…
A:
Q: Statement 1: the income of the estate distributed to the beneficiary during the year is subject to…
A: Statement I is False: The rate applicable is 6% in Philippines Statement II is also False: Since…
Q: A corporation has taxable income from operations of $1 million. In addition, it received $100,000 of…
A: Corporations are the form of an organization having a separate legal entity created by law. The…
Q: 1. Compute 2022 net periodic pension expense.
A: Companies makes the funds which are specially designed with the purpose of making the life of the…
Q: How did you get to the 65,000? What number do you add or subtract?
A: Selling price for special order = $50 - 16% = $42 Fixed manufacturing overhead & Fixed selling…
Q: At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $51 million. At the…
A: Depreciation can be termed as a reduction in the value of an asset over its useful period when used…
Q: n of the ceiling of the hall was in need of repairs, decided to replace the whole of the ceiling…
A: 1. Facts of the scenario : Because a section of the ceiling in the Cinema hall needed to be…
Q: Transcribed Image Text: You have been hired as a financial manager by Alpha Company which sells…
A: Optimal Level of Saftey The term "optimal stock" refers to the stock level that is the most…
Q: $ 9.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead…
A: The minimum price to be charged for the special order will be based on the Relevant Cost. Relevant…
Q: The following data are presented: Budgeted 50,000 Actual 55,000 P800,000 Production in units…
A: Predetermined overhead rate = Budgeted overhead / Budgeted units = P750,000 / 50,000 = P15…
Q: Which of the following U.S. programs has a cap on the amount of income that can be taxed? Question…
A: The social security tax is a type of tax that is charged by the U.S. government. this tax is for the…
Q: AAA Co. plans to acquire XYZ Co. As its subsidiary on April 30, 2022.
A: The capital reserves account is credited if the paid amount of the purchase consideration is lower…
Q: Bryant leased a land to Jose for a period of 11 years starting January 1, 2012 at an annual rental…
A: You have posted a multiple-part question, so as per our policy only the first three inter-linked…
Q: Does the one-hour lunch break not reduce on Dec 24 (Sunday, Special Holiday), Dec 28 (Thursday, Rest…
A: Gross earnings is the total amount payable to laborers before deductions and is based on their…
Q: The residual income amounted to?
A: Income is the amount remaining with the company from the Revenue after taking into consideration the…
Q: Majer Corporation makes a product with the following standard costs: Standard Quantity or Standard…
A: The variance is the difference between the actual data and standard output of the production.
Q: How did you calculate the all items excluding interest?
A: Cash budget represents the outflow and inflow of cash and takes into consideration the beginning…
Q: Using the following assumptions, what was the change in cash from financing? Starting cash was…
A: Financing activities : Financing activities are activities that will affect the size and…
Q: termining whether an amount is of a capital venue nature forms part of the subjective test. lect…
A: All the amounts received or paid, can be of capital nature or revenue nature. It is decided on the…
Q: A term that refers to a situation where the revenue function is equal to the cost function.
A: Revenue function and cost function are two important terms used in cost volume profit analysis.
Q: B Example: 1 Juliana purchases She also pays 4% After the purchase and $2,000 for n
A: Cost of fixed assets shall include it's Purchase cost and all cost incurred to bring the asset to…
Q: n of the following statements' is the fair value model of valuing erty?
A: The answer has been mentioned below.
Q: Marginal cost and marginal benefit analysis are important to compute efficient level of production.…
A: marginal analysis is generally the process of decision making which involve an examination of…
Q: Corridor Company issued 6,000 share of its P100 par ordinary share to Max Las compensation for 1,000…
A: As per our protocol and guidelines are concerned we provide solution to the one question only but as…
Q: Security rules has 2 kinds of implementation specifications, one of them is Required specifications,…
A:
Q: What is the book value of an asset at the beginning of year 8 if its FC is P2 500 000 and with…
A: Cost = 2500000 Economic Life = 12 Year Depreciation rate as per SLM = 100/12 = 8.33% Depreciation…
An asset was acquired on October 1, 2021, for $101,000 with an estimated five-year life and $21,000 residual value. The company uses units-of-production
-
$24,240 gain.
-
$30,800 gain.
-
$15,500 gain.
-
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
- Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
- Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.
- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.