At 30 June 2020, White Ltd reported the following cash-generating unit, with the carrying amount totaling $530,000: Land 200,000 Equipment 600,000 Accumulated (300,000) depreciation - Equipment Goodwill 30,000 All items of property, plant and equipment
Q: During the year 2021, Johnny is having a hard time fin decided to set up a small business in order t...
A: The answer is stated below:
Q: Calculate / Discuss the tax implications of the above for both Tami and Tom.
A: Tax implications is the implications which arises due to the fact of having the taxable income trans...
Q: (d) At 30 June 2002 a company had Klm 8% loan notes in issue, inter yearly on 30 June and 31 Decembe...
A: Statement of comprehensive income The statement of comprehensive income includes revenue and expendi...
Q: This project covers general partnership basis issues including computation of partners' adjusted bas...
A: The significant tax implication for the year are summarized by calculating the Adjusted tax basis of...
Q: I. DIRECT COST AND OVERHEAD COST VARIANCE ANALYSIS Goldilock Inc. produces safe deposit boxes. Durin...
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for you...
Q: ABC Corporation has an investment of 4,000,000 shares in XYZ Corporation. On December 31, 2021, ABC ...
A: A dividend refers to the amount that the shareholders receive from the company in which they have in...
Q: Effect of Errors on Adjusted Trial Balance For each of the following errors, considered individually...
A: The adjustment entries are prepared to keep the record of day to day transactions of the business.
Q: Quantitative information is found А. В. С. D. only in the face of the financial statements. Yes No Y...
A: Financial Statements Financial statements provide the actual performance of a corporation. The balan...
Q: has a ratio of 1.2:1. Can you acquire this firm (and thus take on more debt) without violating your ...
A:
Q: On July 19, 2021, SUNOB acquired 60% of the outstanding shares of YSAE. The business combination res...
A: When the fair value of the non-controlling interest is not given then for the purpose of computing g...
Q: Other de minimis benefits 32,000 Compute the total compensation subject to regular income tax.
A: State tax is a direct tax levied by the state on revenue received from or from the state. In your st...
Q: Johnny, Inc. had dividend income in 2021 of $1,000,000, comprised of dividends from the following co...
A: It is the tax deduction on dividends received by a corporation from other corporations in which the ...
Q: Sydney Ltd repaired a customers' washing machine and charged the customer $500 which the custome pai...
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in...
Q: Common Stock, $1 par value $4,500,0 Capital Contributed in Excess of Par W
A: Stockholders are the Persons of entities whom the company issues its ownership rights in the form of...
Q: Identify false statement(s) about estimating ending inventory using the retail inventory method. 1...
A: As per FIFO method, it is assumed that inventory purchased first is sold out first and ending invent...
Q: Determine the difference in the total depreciation between the two modes of depreciation after 9 yea...
A: Depreciation methods: The accounting techniques used to determine the depreciation throughout its ec...
Q: On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpee...
A: Given:Outstanding voting stock = $ 1,125,000Common stock = $ 1,170,000Retained earnings = $ 58,500No...
Q: Steve Osbourne is considering opening a business, but the major decision faced is how to organize th...
A: Comment- Since we only answer up to 3 sub-parts of the First question, we’ll answer the first 3. Ple...
Q: ABC Corporation has an investment of 4,000,000 shares in XYZ Corporation. On December 31, 2021, ABC ...
A: Dividend in form of shares given to stockholders is called as Stock Dividend Stock Dividend is usual...
Q: PA7-2 (Algo) Analyzing Make-or-Buy Decision [LO 7-2, 7-4] Mohave Corp. is considering outsourcing pr...
A: The incremental analysis is performed when two alternatives are available with the organisation.
Q: The accountant for Murphy Company prepared the following analysis of its inventory at year end: ...
A: Solution Ending inventory is the amount of the inventory which is not sold during a financial year a...
Q: me following units of an item were available for sale during the year: eginning inventory 20,000 uni...
A: The perpetual method of inventory is an effective as well as accurate method for recording the inven...
Q: Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate ...
A: Solution:- Given, Project cost = $2,190,000 years of life = 8 No salvage value Sales units = 91,200 ...
Q: A corporation creates a sinking fund in order to have $640,000 to replace some machinery in 10 years...
A: Future Value- Future value is the price of an asset at a particular date. It measures the supposed f...
Q: 2. A company manufactures and sells a single product which has the following cost and selling price ...
A:
Q: advantages and disadvantages of the scattergram method as compared to the high-low method?
A: Solution High-low method takes high level activity and low level activity and measure the total cost...
Q: In January 2014, ABC Corporation, a new corporation, issued 10,000 shares of common stock with a par...
A: Share Repurchase or Share Buyback means when company buy backs it's share from the investors. The c...
Q: Below is the Stockholder's Equity section of the Reston Corporation's Balance Sheet as of December 3...
A: Stockholder's Equity - Stockholder's Equity includes the amount contributed by shareholders issued i...
Q: CengageNOWv2 | Online teachirn X ow.com/ilrn/takeAssignment/takeAssignmentMan.uo?invoker=&takeAssign...
A: Operating income/(loss) percentage=Operating income/(loss)Sales×100
Q: Income statement Instructions Labels and Amount Descriptions Income Statement Instructions Imaging S...
A: Net Income = Total Revenue - Total expenses Income statement is used to calculated the net income / ...
Q: the course of the audit • The inventory at December 31, 2019, was overstated by P 10,000. • The inve...
A: Observation of Audit 1 The inventory at Dec 31.2019, was Overstated by 10000 2 The inventory a...
Q: Last month, senior management decided to recharge head office costs to the divisions. Consequently, ...
A: An operating budget is a detailed prediction of a company's revenue and expenses over a set period o...
Q: able.
A: Here discuss about the tax burden which are incurred in the insurance policy after the outlive of th...
Q: Central Avenue Company reported net income of P700,000 for the year 2021. The entity declared and pa...
A: Lets understand the basics. Retained earning is a net income that is retained every year after payin...
Q: , net
A: Compensation income: The amount provided to the employees or workers for the work responsibilities p...
Q: Instructions On June 1, 20Y2, Herbal Co. received $50,400 for the rent of land for 12 months. Journa...
A: Number of months between June 1 to December 31 20Y2 = 7 months
Q: 1: Cyrell Company issued 200,000 shares of P5 par value at P10 per share. On January 1, 2019, the re...
A: Introduction Retained earnings are the earnings that is left after dividend distribution to sharehol...
Q: The fringe benefit tax by nature is a final tax. b) The personal expenses of a managerial employee s...
A: a. According to section 33(A) of the NIRC fringe benefit tax on employees income to the withheld b...
Q: Tackett Company sells a single product for $75 each. the variable costs are $45 each. Total fixed co...
A: Formula: Units to be sold to earn a target profit = ( Fixed cost + target profit ) / Unit Contributi...
Q: On June 30, 2021, when ABC Co. stock was selling for $65 each, the equity accounts had the following...
A: Stock dividend is the amount of dividend which is distributed in the form of shares or stock. It inc...
Q: the production range of the Martinez Company ranges from 7,500 units to 12,500 product units. When ...
A: When we say 10,000 units sold it is presumed as per given info 10,000 ...
Q: Gallant Inc. recently changed to FIFO from the average cost method. It reported $127,000 of FIFO...
A: Note: Differance in value of inventory upon changing of inventory valuation method, the differance i...
Q: nY Feported the following shareholders equity vis Com Reacquired 10,000 shares at P30 per share to b...
A: Retained earnings (RE) are those earnings or amount of money which is kept aside by business from th...
Q: Common Shares ($5 par value, 2,000,000 authorized, 402,000 issued, and 400,000 outstanding) $2,010,0...
A: Common stock is the representation of ownership. It shows the investment of owners. They are entitle...
Q: 28 Total sleep time of college students. In Example 4, the total sleep time per night among college ...
A: Solution:- Given, Mean μ = 6.78 hours Standard deviation σ = 1.24 hours SRS of size n = 150
Q: Dexter company manufaturing costd were as follows: Direct material and Direct Labor P 100,000 Depr...
A: The manufacturing overhead consists of total Indirect costs incurred for the production. The manufac...
Q: On January 01, 2021, EFG Company had 100,000 P50 par value ordinary shares outstanding. In addition,...
A: Diluted earnings per share includes the amount which are available for the shareholders per share, a...
Q: Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, ...
A: Note: As per the norms of Bartleby, in case of questions with multiple sub parts, the first 3 subpar...
Q: 5.Pedro earned and incurred the following income and expenses: Compensation (exclusive of mandatory ...
A: Graduated tax rates in Philippines is applied to the business taxable income , the individuals who h...
Q: On 30 June 2019, TIIE Ltd acquired a machine for $180 000 cash, with an expected useful life of 9 ye...
A: The revaluation of assets and liabilities leads to the creation of revaluation reserve by the amount...
Step by step
Solved in 2 steps
- 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.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. 10,000Referring 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?
- Estimate the average total estimated useful life of depreciable property, plant, and equipment. Starbucks reports 580.6 million of depreciation and amortization in the statement of cash flows, of which 4.5 million relates to amortization of limited-life intangible assets. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain.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.
- 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?Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
- 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.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 it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.Assets Acquired by Exchange Bremer Company made the following exchanges of assets during 2019: 1. Acquired a more advanced machine worth 10,000 by paying 2,000 cash and giving up a machine that had originally cost 40,000 and has a book value of 12,000, 2. Acquired a building worth 55,000 by paying 5,000 cash and giving up a piece of land that had originally cost 35,000. 3. Acquired a more advanced machine worth 20,000 by paying 5,000 cash and giving up a machine that had originally cost 13,000 and has a book value of 11,000. 4. Acquired a car by giving up a truck that had originally cost 20,000, has a book value of 15,000, and has a blue book value of 16,800. In addition, the company received 1,000 cash. Required: Prepare Bremers journal entry for each exchange. Assume all exchanges were determined to have commercial substance.