Depreciation expense is 2.4% of the gross beginning balance of property, plant and equipment (PPE). As of December 31, 2021, the gross balance of PPE is P3,980,000. For January 2022, P500,000 new PPE will be acquired. It is the policy of the company that PPE acquired in the first half of the year will be depreciated for one full year. (Assume that PPE, net at the end of 2021 is #3,123,090.) How much is the PPE, net and Accumulated Depreciation - PPE on December 31, 2022? P3,875,670.00; P684,350.00 P3,675,870.00; P864,530.00 P3,575,670.00; P984,550.00 P3,515,570.00; P964,430.00
Q: Bond Info: Coupon Rate 11.875% Quoted Yield 3.000% Maturity Date May 29, 2023 Frequency 2 Tax Rate…
A: On each bond there is periodic coupon payment and these are to be paid each period to the person…
Q: Melissa reviewed her six-month plan for Orchard Creek's Children's Accessory Department, including…
A: A purchased budget prepared by a retailer for the inventory orders in the future for a specific…
Q: The following information about ABC Company is available at December 31, 2020: Employee income…
A: Current Liabilities are those liabilities and obligations which needs to be settled in short period…
Q: The University of Cincinnati Center for Business Analytics is an outreach center that collaborates…
A: Fees for the Symposium = $70 per person Rental cost for auditorium = $150 Registration processing…
Q: Use the percent-of-sales method to prepare a pro forma income statement for the year ended December…
A: A pro forma income statement is a document that shows a company's adjusted income after certain…
Q: Evaluate the following statements using relevant diagrams and provide detailed explanations. The…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: The Affordable Care Act (LO 7.4) Susan and Stan Collins live in Iowa, are married and have two…
A: A tax credit is a monetary sum that taxpayers can deduct directly from their tax returns. Tax…
Q: Enviro Company issues 8%, 10-year bonds with a par value of $340,000 and semiannual interest…
A: Formula: Cash received from the issue of the bonds = Face value of the bonds x issue price / 100…
Q: Orman Company produces neon-colored covers for tablets (e.g., iPads). For last year, Ormanreported…
A: Income statement is prepared with a view to ascertain the net income earned by the entity over a…
Q: Cost Driver rate
A: Cost driver refers to the cost which is affected by some specific business activities and influenced…
Q: On January 1, 2022, Madison contributed $100,000 cash in exchange for a 25% interest in AABC LLC.…
A: Madison contributed $100,000 in cash on January 1, 2022 in return for a 25% investment in AABC LLC,…
Q: ny makes and sells high-quality glare filters for micr er budget and has assembled the following…
A: The answer has been mentioned below.
Q: The University of Cincinnati Center for Business Analytics is an outreach center that collaborates…
A: Variable cost: - A variable cost is the cost which is changes according to the change in the volume…
Q: Piedmont Company sells one cell phone for $500. The contribution margin is $300. What is the…
A: Lets understand the basics. Contribution margin ratio indicates contribution generated compare to…
Q: Prepare the companies financial statements including income statement, equity statement, balance…
A: Financial Statements: Financial Statements are the summary Reports that shows the financial results…
Q: FORD, INC., a dealer of household appliances, sells washing machines at an average price of P8,100.…
A: Current liability is described as the obligation which is to be paid within a period of one year.…
Q: Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts…
A: Cash flow statement (CFS) refers to a financial statement which shows the flows of cash and cash…
Q: Determine the selling price for goods sold on credit
A: All other information are not required. Cost of goods sold on credit and profit percentage are given…
Q: The ABC's statement of financial position shows total shareholders' equity of P3.150.000 as of…
A: Formula used: Book value per share = Total Shareholders equity / Outstanding shares Division of…
Q: The ABD Company began operations several years ago. The company purchased a building and, since only…
A:
Q: On February 5, 2021, an employee filed a P2,000,000 lawsuit against ABC Company for damages suffered…
A: Liabilities are the obligations or dues that needs to be paid out or settled by the business. It can…
Q: 4.) Compute for the Settlement Amount Yield: 5% Coupon Rate: 4% Term: 3 Yrs Frequency: Semi-Annual…
A: Bond Valuation Bond can be valued either par value or in discount value or in premium as well.…
Q: The regression line in a scatterplot is also known as a(n): O A. R-squared line. O B. high-low line.…
A: A regression line seems to be a line that is used to define how a set of data behaves. In other…
Q: Fred is considering three job offers in advertising. • A full-time position as a coordinator that…
A: Gross income is the total earning a worker earns during a time period. However, there are certain…
Q: Add the purchase of land and a warehouse building from Deluxe Properties, check no. 1012, amount:…
A: Introduction: The initial stage of the accounting cycle is a journal entry. A journal records all of…
Q: Golf Trends is an importer of a wide variety of Cleveland golf products. On 1 November 2018 the…
A:
Q: Explain and describe the various costing methods used in management accounting
A: There can be several types of costing methods that are used in Managment accounting that help and…
Q: Define the position of a net creditor
A: After reconciling all of the financial transactions conducted between it and the rest of the world,…
Q: You are considering two job offers: Job 1 is a full-time position that pays $58,000 annually and Job…
A: Gross Annual Income is calculated by deducting all the taxes from the pay received in the month.…
Q: Lansing Company’s current-year income statement and selected balance sheet data at December 31 of…
A: The cash flow statement shows the cash inflow and cash outflow due to the operating activities,…
Q: 2. Raymond and Michele file a joint tax return. Raymond earned $83,000 during the year, while…
A: 1) RAYMOND AND MICHELE FILE JOINT TAX RETURN RAYMOND EARNED $83,000 MICHELLE EARNED - $139,000 FOR…
Q: 3. Complete the table. Round all amounts to the nearest dollar. Approximate Net Pay as Percent of…
A: Weekly earnings can be calculated per week, It means your earnings from your employer determined by…
Q: The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's…
A: As per the norms of Bartleby, in case of multiple sub parts been asked per question, the answer to…
Q: Harvey Company produces two models of blenders: the “Super Model” (priced at $400) and the “Special…
A: ABC costing uses different cost drivers to the overheads. These cost drivers are based on the…
Q: Alec bought a home for $202,000. He had a $48,000 down payment and got a 30-year fixed r mortgage at…
A: Amount of loan = purchase price of the home - down payment made Hence loan amount = 202,000 - 48,000…
Q: Zigwell Manufacturing spent an average of $18 per order to issue 30,000 purchase orders last year.…
A: The estimated cost is based on the estimates. The total estimated cost for purchasing is the cost of…
Q: Sales P1.000.000 Cost of Sales - PS00,000 Rental Expenses - P50,000 Salaries Expenses - P40,000…
A: Introduction: Income statement: All the revenue and expenses items are to be shown in income…
Q: ABE Company factored P100,000 of its accounts receivable to Cee Company for P85,000. An allowance…
A: Cash received = Purchase price- Amount retained by factor Amount retained by factor = Purchase price…
Q: Auditing an attestation client's inventory accounts can vary widely in complexity and time required…
A: Inventory accounts are audited to report on the true and fair state of inventory balances on a…
Q: Name the error which was made under the following circumstances: during the accounting period the…
A: There are various errors in the journal book or T-accounts which may or may not effect the total of…
Q: Problem: Happy realized income of P97.000 before interest and income taxes, with Assets of…
A: There are two ways of raising funds in the company, either through borrowings or by issuing shares…
Q: Interperiod Measurement of Productivity, Profit-Linked Measurement Helena Company needs to increase…
A: Standard as per 20X1 : Power = 184,300/23,038 = 8 = 184,300/46,075 = 4
Q: Claire Corporation owns 80% of Jerald, Inc. ordinary stock. During 2020, Claire sold Jerald for…
A: Claire Corporation owns 80% of Jerald, Inc. The intra-company sales would be eliminated from the sum…
Q: Interest paid or accrued during 2018 on aggregate acquisition indebtedness of $2 million or less ($1…
A: Accrued interest is the amount of interest which has not been paid yet. It is also written as…
Q: Ledger account (strictly with date)
A: Ledger account is the account in which the entries debit and credit rules are entered into the…
Q: On January 4, 2021, Runyan Bakery paid $340 million for 10 million shares of Lavery Labeling Company…
A: Investment accounts consist of the shares in which the company has invested its money and holds some…
Q: The following source document is used to support the transactions related to returns outwards to…
A: Return outwards to creditors means purchase returns.
Q: this year and all other costs of purchasing will increase 2.1%. a. What are the total estimated…
A: Estimated cost per purchase order is the costs which are associated by the company to place an order…
Q: The following data apply to Stratford Ltd: Direct materials inventory, beginning of the year $5,500…
A: Formula used: Direct materials used = Beginning Direct materials + Purchases during the period -…
Q: The total depreciation for the year ended December 31, 2020 is 5. The carrying amount of production…
A: Carrying amount of the assets is the value of the assets which has been computed when the…
Trending now
This is a popular solution!
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 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.
- Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of 20,000. Required: Compute the depreciation expense for 2019 under each of the following methods: 1. straight-line 2. sum-of-the-years-digits 3. double-declining-balance 4. Next Level What effect does the depreciation of the equipment have on the analysis of rate of return?Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.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?
- 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.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.Depreciation Methods Nickle Company purchased three identical assets for 17,000 on January 2, 2019. Each asset has an expected residual value of 1,000. The depreciation expense for 2019 and 2020 is shown below for three assets: Required: 1. Next Level Which depreciation method is the company using for each asset? 2. Compute the depreciation expense for 2021 and 2022 for each asset.
- Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year. Turnip uses differing depreciation methods for financial reporting and income tax purposes. The depreciation expense during the current year for financial reporting is 1,000 and for income tax purposes is 2,000. Turnip is subject to a 30% enacted future tax rate. Prepare a schedule to compute Turnips (a) ending future taxable amount, (b) ending deferred tax liability, and (c) change in deferred tax liability (deferred tax expense) for the current year.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.Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000