i) Calculate and apportion the Hire Purchase interest over the relevant periods using the sun of the digits method.
Q: Adam Sdn Bhd purchased a van costing RM130,000 for use in its business. The hire purchase agreement…
A: Capital allowance is considered as tax depreciation that means depreciation on computed tax…
Q: d, if the contractor was able to finish the building earlier than agreed, it will be rewarded an…
A: In the given situation, a construction contract was agreed upon at certain price with an cost…
Q: Cool Globe Inc. entered into two transactions, as follows: 1. Purchased equipment paying $20,000 at…
A: Journal entry means the writing of the transaction in the books of accounts and this will be…
Q: At the beginning of 2018, VHF Industries acquired a machine with a fair value of $6,074,700 by…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…
Q: On March 31, Higgins Repair Service extended an offer of 415, 000.00 for the Lathe Machines that has…
A: Historical cost concept of accounting says that assets should be recorded in books of accounts at…
Q: As an incentive to enter a 4 year operating lease for a warehouse, Dunhill Company received an…
A: Lease is a type of contract between two parties under which the actual owner of the asset who is…
Q: On 1 September 2017, Seven Food Bhd purchased a packaging machine under hire purchase agreement with…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several…
A: Journal entry refers to recording the financial data of any organization in the chronological order,…
Q: On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several…
A: Nath-Langstrom Services Inc Journal Entries Date Account Debit ($) Credit ($) 01-Jan-21 Right…
Q: Determine the amount of termination benefits and short term employee benefit in accordance with IAS…
A: According to IAS 19 it's is based upon the employee's decision for accepting the offered…
Q: Braxton Technologies, Inc., constructed a conveyor for A&G Warehousers that was completed and…
A: Since multiple subparts are posted, only the first three subparts will be answered. Please resubmit…
Q: Mihawk Company purchased an equipment on January 1, 2020 for P 3,000,000 cash for the purpose of…
A: Part (a) Journal Entry in Books of Lessor In the Books of Mihawk Company Journal Entry…
Q: On January 1, 2018, Nath-Langstrom Services, Inc. a computer software training firm, leased several…
A: Lease payable = Semiannually payment x Present value factor (2%, 4 years) = $10,000*3.80773 =…
Q: A company owes $20,000 on a truck purchased. Assume the company makes timely principle payments of…
A: Definition: Current portion of long-term notes payable: The principal amount of notes payable which…
Q: On January 1, 2016, Nath-Langstrom Services, Inc., a computer software training firm, leased several…
A:
Q: Among the account balance of Jeffrey Corporation at December 31, 2009 are the following: Patent…
A: A patent is the granting of a property right to the inventor by a sovereign authority. This grant…
Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…
A: Definition: Installment note: Installment note is an obligation in which the defaulter needs to…
Q: JJ Contractors entered into a contract on October 2017 to build a warehouse for Francis Corporation.…
A: Solution Vat is the form of tax which is levied on a price of product or service at each stage of…
Q: On July 2, 2020, Covenant Construction London's area's dedicated general contractor purchased a…
A: Profit or loss on sale of old equipment Particulars…
Q: ABC Lid acquired a new packing line from QE Ltd on hire purchase on January 1, 2011. The cash price…
A: Depreciation Expense = Initial Cost - Salvage ValueEstimated Useful life Interest Expense =…
Q: Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made…
A:
Q: On February 1, 2018, Innovation Company purchased a patent for $72,000 cash. Although the patent…
A:
Q: On January 1, Snipes Construction paid for earth-moving equipment by issuing a $300,000, 3-year note…
A: Determine the amount at which Snipes record the equipment and note.
Q: On January 1, James Industries leased equipment to a customer for a four-year period, at which time…
A:
Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…
A: Note payable is a note that is issued by the borrower specifying the terms and conditions pertaining…
Q: Lift Co entered into an agreement to lease office space on January 1, 2014 for a fixed period of…
A: Deferred rent accounting occurs when a tenant is given free rent in one or more periods, usually at…
Q: On January1, Orange Manufacturing paid $40,000 for a patent. Although it gives legal protection for…
A: Amortization is a reduction in the value of assets due to the usage of that asset.We can evaluate it…
Q: n January 1, 20x1, Sunbathe Co. enters into a contract with a customer to transfer a license. The…
A: Cash downpayment 20,000 PV of remaining payments 60,746 (20000*3.0373) = Initial…
Q: Jolibi, Inc. enters into an agreement with Ronald’s Co., clothing the later with full authority to…
A: Step 1 - The initial Franchise revenue can only be recorded when the franchiser has established…
Q: On January 1, 2018, Robertson Construction leased several items of equipment under a two-year…
A: Lease: It is a formal agreement between two parties where in one party lends to another, property or…
Q: On January 1, 2017, Zingo Company signed a contract to lease Bingo Company an equipment has a useful…
A: Part -1 Lesse wil record the asset at present value of Lease Payments $ considering Salvage…
Q: On January 1, 2016, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a…
A: 1. First determine the present value of the note, value of tractor, and discount on note payable.
Q: Cool Globe Inc. entered into two transactions, as follows: Purchased equipment paying $20,000 at…
A: Journal entry means the writing of the transaction in the books of accounts and this will be helpful…
Q: Arrow Co. entered Into a contract with a customer for $500,000. The contract is for the dellvery of…
A: The contract of 500000 has two separate performance obligations. 1. To sell the equipment having a…
Q: On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several…
A: Lease is an agreement between two parties under which one party grants the right to use the asset to…
Q: On 1 st January, 2020 Mr. Abid ordered a number of motor vehicles whose cash price was Tk 25,000 and…
A: Hire Purchase Account In the hire purchase account there is the agreement to repay the amount for…
Q: Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made…
A: 1.
Q: Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the…
A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…
Q: xyz company purchased an equipment for $15,000 cash and signed a note for 5 equal payments of…
A: Compute the Present value of the annual payments; PV of annual payments = $42,123.63 or $42,124.
Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…
A: Purchase Price : $24 Million Period : 12 Months Monthly Interest Rate : 12% / 12 = 1% Annuity rate…
Q: Among the account balance of Jeffrey Corporation at December 31, 2009 are the following: Patent…
A: A patent is an intangible asset shown on the balance sheet. It doesn't have any physical substance…
Q: At the beginning of 2016, VHF Industries acquired a machine with a fair value of $6,074,700 by…
A: 1.
Q: Banco Company acquired a new machine on a delayed payment basis on August 1, 2018. A down payment of…
A: A cost is the worth of money that has been used up to create something or supply a service and is…
Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…
A: Installment note: Installment note is an obligation in which the defaulter needs to repay the…
Q: On 1 January 1, 20x9 Brix Co entered into an agreement to lease a machine that had an estimated life…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: On January 1, 20x1, Sunbathe Co. enters into a contract with a customer to transfer a license. The…
A:
Nene crane ltd acquired equipment on January 1 2006 from quality engineering limited under a two year hire purchase agreement.This required an immediate deposit of 32,000 and a further half yearly installment of 32,000 starting on June 30th, 2006. The cash price was GHS 150,880 the company's financial year ends on 31 December.
Required:
i) Calculate and apportion the Hire Purchase interest over the relevant periods using the sun of the digits method.
ii) Show the quality Engineering Account in the books of Nene Crane Ltd.
Step by step
Solved in 3 steps with 1 images
- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.
- 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.Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
- Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.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, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
- At the beginning of Year 1, Cactus Company has three employees: A, B, and C. Employee A has 3 expected years of future service. Employee B has 4 expected years of future service, and Employee C has 5 expected years of future service. Using the year-of-future-service method, compute the amortization fraction for Years 1 through 5 that Cactus would use to amortize its prior service cost.For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.