Harbin Ltd. has a 31 December year end. A motor vehicle was acquired in July 2019 for £20,000. Depreciation is charged at 25% reducing balance basis, with a full year’s charge in year of purchase and none in year of sale. The vehicle was sold for £10,000 in July 2021. What is the profit or loss on disposal? a) Loss £850 b) Profit £1,250 c) nil profit or loss d) Loss £1,250
Q: I need a Journal entry for this equation
A: Answer:
Q: Scenario: The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just…
A: Cash Flow Statement - Cash Flow Statement show the movement of cash during the financial year. The…
Q: The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been…
A: Given: The information available in the question are as follows: Comparative balance sheet and…
Q: npany schemes? pass-through schemes are usually undertaken by employees in ch pass-through schemes…
A: The pass- through fraud scheme is likely the most common fraud risk statement in expenditure cycle.…
Q: The following are the income of a resident citizen for the period: Interest Income from an…
A:
Q: The following account balances were taken from the books of ABC Company for the month of March.…
A: Solution: Expenses are the cost incurred to earn income for the business. Example of expenses are…
Q: ABC Company started its business operations on November 2, 2021. The following were the transactions…
A: The question is related to the calculation of owner's capital balance at the end of its first…
Q: Through the effects of financial leverage, when EBIT decreases, earnings per share will
A: EBIT(Earnings before interest and taxes) is a measurement of a company's profitability directly…
Q: Rooney Electronics is considering investing in manufacturing equipment expected to cost $330,000.…
A: The question is based on the concept of Financial Management. As per the Bartleby guidelines we are…
Q: Q1. Describe the process for implementing a leveraged buyout.
A: Answer:
Q: ABC Ltd. receives $12,000 in dividends from a non-connected corporation, Telus Corp. Which of the…
A: The dividend is the distribution of profit among the shareholders of the company in order to provide…
Q: Using the equity method for reporting strategic investments, how does investment revenue and…
A: Equity method is an accounting method to compute the investment value in ventures. Under this…
Q: he objective of internal control of purchases is to:
A: Internal control is a process which helps an organization achieve its objectives toward operational…
Q: The Chapter 6 Form worksheet is to be used to create your own worksheet version of the Review…
A:
Q: assify Costs llowing is a list of various costs incurred in producing replacement automobile parts.…
A: In this question, there is a list of various incurred in producing replacement automobile parts. We…
Q: The following items appeared on the 2021 financial records of ABC Company: Service Income P600,000…
A: Net income means the profit earned by the business after deducting all the expenses related with the…
Q: The City of Wolfe issues its financial statements for Year 4 (assume that the city uses a calendar…
A: GIVEN DATA The City of Wolfe issues its financial statements for Year 4 (assume that the city…
Q: What is the break-even level of output for each scale of operation? Round your answers to the…
A: As per our protocol we provide solution to the one question or to the first-three sub-parts but you…
Q: Consider the following data: Sales -- P 100,000; Gross Profit rate based on sales -- 30%; Goods…
A: Ending Finished goods = Goods Available for Sale - Cost of goods sold where, Cost of goods sold =…
Q: ABC Company started its business operations on November 2, 2021. The following were the transactions…
A: Ending Owner's capital balance = Investment made by the Owner + Net income where, Net income =…
Q: 1. The sales department has pitched the idea to the owner that increasing the annual sponsorship to…
A: This question is based on the calculations and we will calculate : (1) What is total difference…
Q: ABC Company started its business operations on November 2, 2021. The following were the transactions…
A: Owner capital balance means the amount that belong to the owner of the business. It increase with…
Q: P16.6 (LO.5) Groupwork (Computation of Basic and Diluted EPS) Charles Austin of the controller's…
A: Preference share- Preference shares, more frequently referred to as preferred stock, are shares of a…
Q: Show Attempt History Current Attempt in Progress Byrd Co. uses the percentage-of-receivables basis…
A: Account Titles and Explanation Debit Credit Bad Debts Expense $ 5,200 Allowance…
Q: Expenditures—Operating—Salaries..........................................…
A: Salaries payable is the amount which is due to the employees but not yet paid.
Q: How much is the net income for the year 2021?
A: Answer:
Q: rue or False. 1. The heading on each financial statement lists the three W’s- Who (the name of the…
A: Each and every type of company makes its financial statements irrespective of its size and the…
Q: True or false The income or loss reflected in the Income Statement is the result of the application…
A: The major accounting concepts are enumerated as below : a) Accrual b) Consistency c) Going concern…
Q: otal assets of the Company are $81000 and its owner's equity is $61000. What is the amount of it
A: Liabilities = Assets - Owner's equity
Q: SLM #9 Directions. Prepare a single-step Income Statement For the year ended Dec. 31, 2019, at space…
A: Introduction:- A single-step income statement shows a straightforward or simple view of a company's…
Q: please answer accordingly
A: Given Information Lathe A LatheB First Cost 40,000 56,000 Salvage Value 5,000 7,000…
Q: Problem 2 The Magnolia Corporation has a cycle time of 1.5 days, uses a raw and in process account,…
A: Answer- Working Note : 1. Material Content of FG - Purchases 444,000 Mat in RIP beg…
Q: Problem 2 On January 1, 2018, Rampant Company reported that the allowance for doubtful accounts has…
A: Accounts receivable includes the amount which is yet to be received when seller sells the goods on…
Q: B. The following account balances were taken from the ledger of Wilfredo Baltazar, a public relation…
A: Solution: Trial balance list the debit and credit balances in order to ensure that total of debits…
Q: 26. $ provide you with $30,000 for a down payment for your first home. You mentioned to her you plan…
A: 26. Time value of money is the concept widely used by management, individuals to determine the…
Q: ABC Company, a computer repair shop provided the following information at the end of its first month…
A: To calculate the net profit (loss) of a company, an income statement is prepared for the period in…
Q: stock plus land with a 5,848. Auto Corp's la 160 prior to the exch s had a basis of $2,19:
A: The answer has been mentioned below.
Q: accounting cycle is the preparation of the financial
A: There are 8 step in accounting cycle. (1) Identify the transaction i.e Economic transaction or not…
Q: Required information [The following information applies to the questions displayed below.] In 2021,…
A: Earned Income Credit: The United States government's procured earned income tax credit or acquired…
Q: Hudson Company reports the following contribution margin income statement. HUDSON COMPANY…
A: The margin of safety is the amount of profitability that results from the difference between the…
Q: statement data, what is the debt to assets rati 2$ Current assets Net income 21600 44900…
A: The ratio analysis helps to analyse the financial statements of the business. The debt to assets…
Q: The following items of income are reported by Cute, a CPA Salary as an accountant P150, 000 Overtime…
A: Taxpayers: Taxpayers can be the individuals or an entities who are bound to pay taxes on their…
Q: An adjusting entry O involves parties external to the entity O is recorded anytime of the accounting…
A: Adjustment entry means the entry made at the end of specified period to adjust some balance . For…
Q: The amount to be invested by Nicole is
A: Balance Sheet of Nicole Business Liabilities Amount Assets Amount Capital 350000…
Q: Nevada Corporation has 68,200 shares of S25 par stock outstanding that has a current market value of…
A: Introduction: Stock split: Splitting of shares face value in to parts called as Stock split. After…
Q: An income statement for Sam's Bookstore for the first quarter of the year is presented below:…
A: The metric, also known as dollar contribution per unit, illustrates how a single product contributes…
Q: explain why payback period is not a preferred method
A: The payback period is a period in which the total costs of an investment are recovered through cash…
Q: QUESTION 2 Itemized deductions are an add back for AMT purposes O True False
A: Solution Itemized deduction is the expense which is substracted from adjusted gross income in order…
Q: On April 1, Year 1, Halo Co. issued a $5,000 face value discount note to the Capri Bank. The note…
A: Cash received from the issue of Notes = Face value of the Notes - discount amount where, Discount…
Q: Explain the following terms. Include the definition, how they are calculated, treated in the…
A: In addition to salaries, many companies offer other benefits to their employees such as pension…
Harbin Ltd. has a 31 December year end. A motor vehicle was acquired in July 2019 for
£20,000.
year of purchase and none in year of sale. The vehicle was sold for £10,000 in July 2021.
What is the profit or loss on disposal?
a) Loss £850
b) Profit £1,250
c) nil profit or loss
d) Loss £1,250
Step by step
Solved in 3 steps with 2 images
- 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. 10,000On 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.
- 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?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.
- 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.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?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.
- 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. 400,000Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.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.
