Crane Mart and Cullumber Shop are two companies of roughly the same size both running a chain of convenience stores. Each company depreciates its plant assets using the straight-line method. An investigation of their financial statements reveals the following information: CraneMart CullumberShop Net income $ 164,052 $ 166,020 Sales revenue 1,121,400 1,386,000 Total assets (average) 5,468,400 6,917,400 Plant assets (average) 2,079,000 2,394,000 For each company, calculate: (Round answers to 2 decimal places, e.g. 52.75.) CraneMart CullumberShop A. Return on assets B. Asset turnover
Q: Garcia Co. owns equipment that cost $80,000, with accumulated depreciation of $42,400. Record the…
A: Garcia Co Journal Entries Event Particulars Debit Credit 1 Cash $49,400.00 Accumulated…
Q: Jersey plc has a division with the following balances in its Statement of financial position. The…
A: An impairment loss shall be recognized for a cash-generating unit if the recoverable amount of the…
Q: Blue Spruce Company and Swifty Corporation, two corporations of roughly the same size, are both…
A: The Formula to Calculate Asset Turnover is as follows: Asset Turnover = Sales/Average Total Assets
Q: Chance Company had two operating divisions, one manufacturing farm equipment and the other office…
A: Income statement.
Q: On December 1, B Company purchased a 4,000,000 tract of land for a factory site. The entity razed…
A: Carrying value of asset is the net balance of asset which is left after making all adjustments…
Q: The Kerr-Graham Corporation had two operating divisions, one manufacturing cooking utensils and the…
A: Net income:Net income is the total earnings (or profit) of a company / individual excluding the…
Q: Garcia Co. owns equipment that cost $84,800, with accumulated depreciation of $44,800. Record the…
A: The process of recording business transactions in the books of accounts for the first time is…
Q: Blue Oak Investments owns a retail business which has suffered badly during the recession. Blue Oak…
A: The exact meaning of an impairment loss seems to be a drop in an underlying asset net carrying value…
Q: a. Is the acquisition of Arya Company constitute a business? Justify your answer in no more than…
A: Introduction of acquisition A business constitutes an undertaking of activity for monetary…
Q: Due to rapid employee turnover in the accounting department, the following transactions involving…
A: Prepare journal entires to correct the error in recording research and development expenses.
Q: On January 1, 20x1, Horror Co. acquired a building costing ₱1,200,000. Professional fees for legal…
A: Investment property is the property which is held by the company to earn from it. The earnings from…
Q: Prepare any appropriate journal entries for goodwill impairment assuming that Marin Construction &…
A:
Q: Recover Co. has the following assets: Land used as plant site 50,000 Land and building classified as…
A: Assets that is classified as property,plant and equipment are as under. Correct answer is option (b)…
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: The concept under which the assets' acquisition is recorded at the amount paid for it can be…
Q: On January 1, 20X2, Sansa Company purchases two (2) separate sets of assets and activities from…
A: a) Companies acquire other companies for various reasons and one of the reason is growth strategy.…
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: Cost concept :— Under cost concept, aquisition of assets or any other items should be recorded at…
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: The concept under which the acquisition of the assets is recorded at the amount paid for it can be…
Q: Nashs Construction & Paving expanded its business by purchasing Alcott Maintenance, a division that…
A: Step 1 Journal is the Part of Book Keeping.
Q: Smith Company purchased P105,000 of computer equipment from Brown Company. Smith Company paid for…
A: Journal means the book of prime entry where all entries are recorded in different pages.
Q: Smith Corp. is in the process of liquidating and going out of business. The firm has $20,000 in…
A: A person who is the owner/holder of the stock in the corporation is known as a stockholder.
Q: Gulf sands LLC Company had two operating divisions. One division manufactured washing machine and…
A: As per the requirement of the question, we will answer “c” part.
Q: Walsh Inc. is a privately held company with an August 31st fiscal year end. Walsh’s operations…
A: Impairment loss = Carrying value of the assets - Recoverable value of the assets where, The…
Q: Potter owned a 100% subsidiary, Hogwart that is treated as a cash generating unit. On 31 December…
A: Impairment of loss refers to the situation when a recognized reduction in the carrying amount of an…
Q: Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: Recover Co. has the following assets: Land used as plant site 50,000 Land and building classified…
A: Answer is option c) 2,142,000
Q: Garcia Co. owns equipment that costs $76,800, with accumulated depreciation of $40,800. Garcia sells…
A: Gain (Loss) on Sale of Equipment = Sale Consideration - (Cost - Accumulated Depreciation)
Q: Orioles Construction & Paving expanded its business by purchasing Alcott Maintenance, a division…
A: SOLUTION- IMPAIRMENT OF ASSETS =CARRYING AMOUNT - RECOVERABLE AMOUNT RECOVERABLE AMOUNT IS HIGHER…
Q: The Bomb Pop Corporation sold ice cream equipment for $18,500. The equipment was originally…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: The cost concept of accounting states that all acquisitions of items (eg, assets or items needed for…
Q: Sheffield Corporation and Flounder Corporation, two companies of roughly the same size, are both…
A: Return on assets = Net income / Average Total assets
Q: Prepare any appropriate journal entries for goodwill impairment assuming that Oriole Construction &…
A:
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: Historical cost principle: According to the principle of historical cost, the cost incurred to…
Q: Bacon Inc., a Boston-based engineering, acquired a machinery with a price of $15,200 by trading in…
A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…
Q: Nashs Construction & Paving expanded its business by purchasing Alcott Maintenance, a division that…
A: Imparement of Asset = Carrying Amount - Recoverable Amount Recoverable amount is higher of: Value…
Q: Diaz Company owns a machine that cost $125,500 and has accumulated depreciation of $93,000. Prepare…
A: To calculate the gain or loss on selling machine use the below formula Gain/ (Loss) on disposal…
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: Whenever company purchase land,it should be recorded at purchase cost irrespective of its market…
Q: Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of…
A: Intangible Assets: These are the long-term assets having no physical existence. However, the…
Q: During the current year, Ramirez Developers disposed of plant assets in the following…
A: Journal entry: Journal is a book of prime entry or a book of original entry in which transactions…
Q: Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment.…
A: Land Buildings Machinery and Equipment Other Abstract company’s fee for title search…
Q: Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported…
A: Land is the kind of non-current or fixed asset. It is the asset which is kept for long term use and…
Q: Andrea Company has one division that performs machinery operations on parts that are sold to…
A:
Q: UPS purchased a six-acre tract of land in Columbia, SC and an existing building for $500,000. The…
A: The property plant and equipment include long-term assets. The land is also a long-term asset. When…
Q: During the current year, Hitchcock Developers disposed of plant assets in the following…
A: Disposal of asset: Disposal of asset is a non-recurring transaction, which record the sale of asset.…
Q: The Kerr-Graham Corporation had two operating divisions, one manufacturing cooking utensils and the…
A: Definition of Income Statement:Income Statement or profit & loss account is one of the financial…
Q: Questions: a. Is the acquisition of Arya Company constitute a business? Justify your answer b. Is…
A: When a company acquires sets of assets and activities from another business, it is to be determined…
Q: How much is classified as property, plant and equipment?
A: The following amount will be classified as Property, Plant and equipment Particulars Amount 1)…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- In the current year, Randa Merchandising Incorporated sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. A listing of the major sections of an income statement follows. Item Debit Credit 1. Net sales $ 4,700,000 2. Gain on state's condemnation of company property 373,000 3. Cost of goods sold $ 2,399,000 4. Income tax expense 352,000 5. Depreciation expense 376,000 6. Gain on sale of wholesale business segment, net of tax 1,256,000 7. Loss from operating wholesale business segment, net of tax 720,000 8. Loss of assets from meteor strike 1,037,000 Prepare the December 31 year-end income statement. (Loss amounts should be indicated with a minus sign.)Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $95,239. The Focus Company initially offered to buy the land for $108,852. The companies settled on a purchase price of $212,000. On the same day, another piece of land on the same block sold for $102,714. Under the cost principle, at what amount should the land be recorded in the accounting records of Focus Company? a.$102,714 b.$95,239 c.$212,000 d.$108,852On January 1, 20X2, Sansa Company purchases two (2) separate sets of assets and activities from third-parties, as follows:i. A manufacturing plant of Arya Company. The set of assets acquired and liabilities assumed are as follows:Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000Sansa will continue to employ the existing employees of the manufacturing plant and will pay them the same salaries as before. The above manufacturing plant is a cash-generating unit that generates outputs that are sold to outside customers. Sansa pays a cash consideration of P100 million to Arya Company.ii. A set of assets and liabilities of Bron Company.Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000The vendor will retrench the existing employees of the factory and pay their termination benefits. The set of assets is not capable of generating independent cash flows.…
- On January 1, 20X2, Sansa Company purchases two (2) separate sets of assets and activities from thirdparties, as follows:i. A manufacturing plant of Arya Company. The set of assets acquired and liabilities assumed are as follows:Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000Sansa will continue to employ the existing employees of the manufacturing plant and will pay them thesame salaries as before. The above manufacturing plant is a cash-generating unit that generatesoutputs that are sold to outside customers. Sansa pays a cash consideration of P100 million to AryaCompany.ii. A set of assets and liabilities of Bron Company.Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000The vendor will retrench the existing employees of the factory and pay their termination benefits. The setof assets is not capable of generating independent cash flows. However,…On January 1, 20X2, Sansa Company purchases two (2) separate sets of assets and activities from thirdparties, as follows:i. A manufacturing plant of Arya Company. The set of assets acquired and liabilities assumed are as follows:Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000Sansa will continue to employ the existing employees of the manufacturing plant and will pay them thesame salaries as before. The above manufacturing plant is a cash-generating unit that generatesoutputs that are sold to outside customers. Sansa pays a cash consideration of P100 million to AryaCompany.ii. A set of assets and liabilities of Bron Company.Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000The vendor will retrench the existing employees of the factory and pay their termination benefits. The setof assets is not capable of generating independent cash flows. However,…Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $220,000. The Focus Company initially offered to buy the land for $177,000. The companies settled on a purchase price of $212,000. On the same day, another piece of land on the same block sold for $232,000. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company?
- Indigo Corporation and Blue Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe-tracing devices. Each company depreciates its plant assets using the straight-line approach. An investigation of their financial statements reveals the information shown below. For each company, calculate these values: 1) Return on assets 2) Profit margin 3) Asset turnoverGarcia Company owns equipment that cost $83,600, with accumulated depreciation of $44,200. Record the sale of the equipment under the following three separate cases assuming Garcia sells the equipment for (1) $52,100 cash, (2) $39,400 cash, and (3) $34,300 cash. Journal entry worksheet 1. Record the sale of equipment assuming Garcia sells the equipment for $52,100 cash. 2. Record the sale of equipment assuming Garcia sells the equipment for $39,400 cash. 3. Record the sale of equipment assuming Garcia sells the equipment for $34,300 cash.Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $221,567. Focus Company initially offered to buy the land for $181,076. The companies settled on a purchase price of $209,946. On the same day, another piece of land on the same block sold for $231,997. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company? Oa. $221,567 Ob. $231,997 Oc. $209,946 Od. $181,076
- Dalmatian Corp. follows IFRS and had the following transactions during its year ended December 31: Spent $135,000 developing its brand. Incurred development costs of $254,000 for a new product that met all the intangible asset recognition criteria on September 30 of that same year. Of the $254,000 spent, $160,000 was incurred after September 30. Purchased a customer list for $89,000 from a competitor that was closing its business. What is the total cost of intangible assets that were capitalized during 2020?Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items.Patent with 4 remaining years of legal life $32,200Goodwill 43,700Dynamo’s financial condition just prior to the acquisition of these assets is shown in the following statements model.Balance Sheet Income StatementAssets= Liabilities +Stockholders’Equity Revenue − Expenses = Net IncomeStatementof CashCash Flows + Patent + Goodwill92,000 + NA + NA = NA + 92,000 NA − NA = NA NARequireda. Compute the annual amortization expense for these items.b. Show the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model.c. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for yearThe Walston Company is to be liquidated. It has the following liabilities: Income taxes $ 9,400 Notes payable (secured by land) 134,000 Accounts payable 92,000 Salaries payable (evenly divided between two employees) 13,000 Bonds payable 77,000 Administrative expenses for liquidation 27,000 The company has the following assets: Book Value Fair Value Current assets $ 87,000 $ 42,000 Land 107,000 97,000 Buildings and equipment 107,000 131,000 How much money will the holders of the notes payable collect following liquidation?