At January 1, 2022, Porter Manufacturing revised the estimated useful life of a major piece of machinery. Due to advancements in technology, the company reassessed the useful life of the machinery and determined that it would be productive for only 6 more years starting from that date. At December 31, 2021, the machinery had a book value of $120,000. Depreciation for 2021 was based on a remaining useful life of 10 years and no salvage value. The company uses straight-line depreciation. What is the revised depreciation expense for 2022? Answer a. $20,000 b. $12,000 c. $25,000 d. $15,000
Q: Costa is a single taxpayer. His regular tax liability was $38,000. For 2023, he reported $190,000 of…
A: Alternative minimum tax is introduced so that, every individual pays his/her share of the tax…
Q: A company makes bikes from recycled metal. For a recent job lot of 200 bikes, the company incurred…
A: Total manufacturing cost= Direct material + Direct labor + Factory overheadNote- Factory overhead…
Q: Required information [The following information applies to the questions displayed below] Praveen…
A: The break-even sales are the sales where business earns no profit or loss during the period. The…
Q: Maria Am Corporation uses the weighted-average method in its process costing system. The Baking…
A: EQUIVALENT UNITS OF PRODUCTION Equivalent Production represents the production of a process in…
Q: At the end of the prior annual reporting period, Barnard Corporation's balance sheet showed the…
A: Lets understand the basics.Stockholders Equity consist of the share which the shareholders has…
Q: Mason Corporation had $1,096,000 in invested assets, sales of $1,217,000, operating income amounting…
A: The objective of the question is to calculate the profit margin for Mason Corporation. The profit…
Q: The entry to record a sale on account of merchandise of $300 subject to sales tax of 6% includes a…
A: The journal entries are prepared to record the transactions on regular basis. The assets are debited…
Q: Assume that the stockholders' equity section on the balance sheet of Dillard's, a popular department…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Carla Vista Company is considering investing in an annuity contract that will return $34,500…
A: Present Value of Investment = Annual Return x Present Value of Annuity Factor
Q: Blossom Company has a factory machine with a book value of $85,000 and a remaining useful life of 5…
A: As project is 5 years we need to check savings and cost for 5 years
Q: Desarials Corporation uses the following activity rates from its activity-based costing to assign…
A: The overhead is applied to the production on the basis of predetermined overhead rate. The…
Q: Robert Company manufactures 2 products, Flacca and Gordo. Overhead costs are comprised of machine…
A: Expenses incurred by a business that are not directly connected to goods or services are known as…
Q: Coronado Inc. uses the retail inventory method to estimate ending inventory for its monthly…
A: Retail price is the price at which the product is sold to the customer. It is the sum of cost and…
Q: Elmira Tool and Die makes machine tools to order. The following transactions occurred in October: 1.…
A: In the realm of manufacturing, efficient cost accounting and tracking are essential for businesses…
Q: Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling…
A: variable cost per unit current = $111New = $111 * 110% = $122.10 Fixed CostCurrent = $850,000New =…
Q: On October 31, 2024, Affleck Company's general ledger shows a cash account balance of $8,424. The…
A: The bank reconciliation statement is prepared to equate the balances of the cash book and pass book…
Q: Dynamic - Problem and answer changes with each attempt (consider an Excel solution) Farm Supply is…
A: Budgeting is the process of estimating future operations based on past performance. % are estimated…
Q: ded depreciation using the straight-line method, a five-year service life, and a $1,500 resid ded in…
A: Depreciation by straight line method : The straight line method od depreciation reduces the value…
Q: On January 1, 2023, Sandhill Corporation purchased a newly issued $1,575,000 bond. The bond matured…
A: Bond is a debt security which is purchased to earn a fixed interest for the invested period. The…
Q: When an uncollectible account is recovered after it has been written off, he company should record…
A: Under the allowance method company makes provisions for uncollectible accounts at the end of the…
Q: Problem 12-05 (Algo) [LO 12-3] Ms. Singh, who is in the 37 percent tax bracket, owns a residential…
A: Tax cost to Ms. Singh = Taxable Income from apartment complex × Ms. Singh marginal tax rate=…
Q: Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier.…
A: Flexible budget :— This budget is prepared by multiplying standard variable amount per activity…
Q: Question 7 of 100 How will a pool car operator be affected when there is loss or damage to cargo?…
A: Pool car operator will have legal obligation to transport cargo safely and carefully. So they will…
Q: ABC Company has set the following standards for one unit of product: Direct materials: 0.5 pounds a…
A: Direct labor variance is the difference between standard direct labor cost for actual production and…
Q: When preparing adjusting entries at December 31, 2022, DC Co. discovered that sales salaries of…
A: The objective of the question is to understand the impact of an uncorrected error in the accrual of…
Q: Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors.…
A: Budget is the estimation of revenue and expenses prior to starting the operation. To manage the…
Q: CP 7-1 The following transactions were made by Landers Corp. in March 2019. Mar. 1 12 Established a…
A: Journal entries consist of all the business financial transactions.They are recorded in…
Q: Software Solution (SOS) helps subscribers solve software problems. All transactions are made over…
A: Partial operational productivity = Number of calls handled/Number of engineersFinancial operation…
Q: Bellevue Chemicals had beginning work-in-process inventory of $256,535 on March 1. Of this amount,…
A: Direct material cost is the cost of raw material produced or purchased to produce the final…
Q: Use the following information for the Problems below: The following data pertain to three divisions…
A: ROI means return on investment.. It is the percentage return earned by the entity on the operating…
Q: Sales in units Contribution margin Estimated demand Actual demand Question 9 Listen Calculate the…
A: As per our guidelines, in case of multiple questions, we are only required to solve first, if you…
Q: E10-1 (Algo) Determining Financial Statement Effects of Transactions Involving Notes Payable [LO…
A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.The…
Q: Wildhorse Corporation operates in an industry that has a high rate of bad debts. Before any year-end…
A: Bad debt expense is the amount of accounts receivable that are no longer receivable from customers…
Q: The Xtra Store has a Human Resources Department and a Janitorial Department that provide service to…
A: The costs can be allocated among departments using various methods as direct, step down and…
Q: Wildhorse Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50…
A: Contribution margin is the excess of sales over variable cost. Variable costs changes over with…
Q: Colson Company has a line of credit with Federal Bank: Colson can borrow up to $386,000 at any time…
A: The fee a borrower pays for accessing funds from a revolving line of credit is known as interest on…
Q: Adams Co. uses a job order costing system. The following information is available from its records.…
A: PREDETERMINED OVERHEAD RATEPredetermined rate means the indirect cost rate.The predetermined…
Q: Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May…
A: The balance sheet represents the financial position of the business with assets, liabilities and…
Q: Grapefruit Inc. purchased Tangelo Inc for $1,000,000. Included in the purchase were tangible net…
A: Here The excess amount paid in addition to fair value of assets received is to be considered as…
Q: Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One…
A: Financing activities include activities relating to the raising or repayment of funds by the entity…
Q: Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and…
A: Contribution margin is the amount of money earned by the entity after deducting variable expenses…
Q: Suppose that Karen deposits $400 into her checking account at the bank. The reserve requirement for…
A: In this scenario, we'll explore the impact of a deposit on a bank's balance sheet following Karen's…
Q: A B 15 12 Materials quantity variance input 16 13 Actual quantity of materials used 17 14 18 15 19…
A: Variance is the difference in the value of budgeted quantity. and the actual cost \quantity. Direct…
Q: Exercise 8-11 (Static) Cash Budget Analysis (L08-8] A cash budget, by quarters, is given below for a…
A: Cash Budget is that budget which helps every organisation to maintain a cash balance for day to…
Q: Branson Corp. purchased a new machine for its business. The following list shows the various…
A: As per IFRS/IAS 16 Property, plant and equipment the capitalized cost of machine consists of…
Q: Becker Office Service purchased a new computer system on January 1, Year1 for $36.100 It is expected…
A: Lets understand the basics.Depreciation is a reduction in value of asset due to wear and tear,…
Q: Division Asia-Pacific Central and South America Europe North America Minutes (Thousands) 280 608…
A: Joint costs means the costs incurred in producing multiple products simultaneously from the same raw…
Q: A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires…
A: The cash budget is prepared to record the cash receipts and cash payments during the period. It…
Q: Bosco Company adopted the dollar-value LIFO retail method at the beginning of 2024. Information for…
A: Inventory is the current asset of the company it sells it to make a profit. The inventory increases…
Q: Required information Exercise 9-8A (Algo) Current liabilities LO 9-1, 9-2, 9-4 [The following…
A: Current liabilities are financial obligations or debts that a company is expected to settle within a…
At January 1, 2022, Porter Manufacturing revised the estimated useful life of a major piece of machinery. Due to advancements in technology, the company reassessed the useful life of the machinery and determined that it would be productive for only 6 more years starting from that date. At December 31, 2021, the machinery had a book value of $120,000.
Answer
$20,000
$12,000
$25,000
$15,000
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- 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.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.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?
- During 2019, White Company determined that machinery previously depreciated over a 7-year life had a total estimated useful life of only 5 years. An accounting change was made in 2019 to reflect the change in estimate. If the change had been made in 2018, accumulated depreciation at December 31, 2018, would have been 1,600,000 instead of 1,200,000. As a result of this change, the 2019 depreciation expense was 100,000 greater than it would have been if no change were made. Ignoring income tax considerations, what is the proper amount of the adjustment to Whites January 1, 2019, balance of retained earnings? a. 0 b. 100,000 c. 280,000 d. 400,000At 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.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.
- At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.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. 10,000The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the Machinery account. At the beginning of 2019, the book value of the machinery was 100,000. No residual value is expected, the remaining estimated life is 10 years, and straight-line depreciation is used. b. All purchases of materials for construction contracts still in progress have been immediately expensed. It is discovered that the use of these materials was 10,000 during 2018 and 12,000 during 2019. c. Depreciation on manufacturing equipment has been excluded from manufacturing costs and treated as a period expense. During 2019, 40,000 of depreciation was accounted for in that manner. Production was 15,000 units during 2019, of which 3,000 remained in inventory at the end of the year. Assume there was no inventory at the beginning of 2019. Required: Prepare journal entries for the preceding errors discovered during 2020. Ignore income taxes.
- 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.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.
