In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis. The balancing adjustment is: a. $3,700,000 b. $4,500,000 c. $4,000,000 d. $3,200,000
Q: Vaughn, Inc. reported net income of $2.45 million in 2022. Depreciation for the year was $156,800,…
A: Cash flow statement :— It is one of the financial statement that shows change in cash and cash…
Q: Preble Company manufactures one product. Its variable manufacturing overhead is applied to…
A: There are two types of manufacturing overhead.They are fixed manufacturing overhead and variable…
Q: Virtual Pet Company makes two products- The Virtual Parakeet and the Virtual Slug. The Company had…
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: 10. The master budget is a comprehensive document specifying sales targets, production activities,…
A: The master budget is a comprehensive document that serves as a financial planning tool for an…
Q: Balance Sheet June 30th, Year 5 Assets…
A: It is the amount received from the customers during the accounting year. Sales are made on account…
Q: The auditor is required to prepare audit documentation sufficient to enable an experienced auditor,…
A: Audit documentation is the principal record of auditing procedures applied, evidence obtained, and…
Q: Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments:…
A: Fabrication department overhead allocation rate=Fabrication department budgeted factory…
Q: Preble Company manufactures one product. Its variable manufacturing overhead is applied to…
A: Material quantity variance is the difference between the cost estimated for the material purchase…
Q: Melinda opened a savings account for her daughter on the day she was born, depositing $1,000: Each…
A: Future value of a present value is the value of that amount after taking into account the time value…
Q: Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $…
A: Calculate the acquisition price per share:The acquisition price per share is the amount Firm X pays…
Q: Company is appr ched by a new customer to provide 1,680 units of its product at a special price of…
A: Special Order Decision Analysis Is a Method Businesses Use To Evaluate The Net Income Of Accepting…
Q: PROBLEM 11-28 Make or Buy Decisions LO11-3 "In my opinion, we ought to stop making our own drums and…
A: A make-or-buy decision seems to be a behaviour of employing cost-benefit analysis to make a…
Q: 2. What are the limitation
A: The statement of cash flows, as defined by the International Accounting Standards (IAS) 7, provides…
Q: Revenue items that are earned but have not been collected or recognized are called: Unearned…
A: Revenue which are also known as sales or income, is the money a company receives from its normal…
Q: Define “Risk management”.
A: Risk management refers to the term which is used in accounting or business as it states that the…
Q: Creative Computing sells a tablet computer called the Protab. The $740 sales price of a Protab…
A: Allocating the transaction price is to be done based on the standalone selling price of the…
Q: In 2020 , its 1st year of operations, Fanatic Company earned $20,000 of income before taxes.…
A: (a) The reconciliation of financial income to taxable income for Fanatic Company in 2020 is as…
Q: would communicate matters of governance with_ Select one: a. Only the Audit Committee and never the…
A: An audit committee is a committee of an organisation's board of directors which is responsible for…
Q: Assuming that total dividends declared in 2025 were $64,000, and that is fully participating and…
A: Preferred stock is a type of stock that gives shareholders certain preferential rights and…
Q: Comparative financial statement data for Carmono Company follow: Assets Cash Accounts receivable.…
A: The indirect cash flow approach determines cash flow by adjusting net income with differences…
Q: the IASB Conceptual Framework of Accounting. Why is a Conceptual
A: In accounting principal and regulations are very important and necessary because they provide…
Q: 12. Which of the following statements is true? a. The holding period for a stock received as a…
A: The holding period for property is the length of time that a taxpayer has owned a particular…
Q: For which of the following conditions will the lessor classify a lease as a sales-type lease? a.The…
A: Lease classify as sale type lease means it is a financial lease where lessor has given right to use…
Q: When passing a journal entry for this transaction what would be credit? "Bought delivery truck on…
A: Journal entries are the primary reporting of the business transaction in the books of accounts.…
Q: cash flow will (circle
A: Total relevant revenues = selling price per unit * number of units sold. equals 425 * 4,000 =…
Q: Which of the following is correct about control risk? Select one: a. None of the above b. It is the…
A: There are different types of risk in audit. Control risk is type of one such risk.
Q: Required 1. Compute the total overhead allocated to each job under a simple costing system, where…
A: Absorption rate per Machine hour (Simple Costing) = Total Overhead / No. of Machine Hours…
Q: Adams Publications established the following standard price and costs for a hardcover picture book…
A: Answer:- Income statement meaning:- An income statement is a financial statement that lists the…
Q: Use the 2016 marginal tax rates to compute the tax owed by the following person. A married man…
A: Taxable income refers to the amount of an individual's or a business's income that is subject to…
Q: Truck Components has an inventory of 525 obsolete remote entry keys that are carried in inventory at…
A: In this Question, we are computing the Operating Income in different conditions to find out which is…
Q: Suppose your annual income is $29182 and there are two tax brackets: 10% for $0-$20,000 and 30% for…
A: Tax amount is the amount of tax obligation that an entity has to pay on its income to the government…
Q: 1.A common stock paid a dividend at the end of last year of $2.30. Dividends have grown at a…
A: EXPECTED RATE OF RETURN ON STOCK Expected Rate of Return is the Percentage of Income Earned from…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115,…
A: Costs are classified into variable or fixed. Variable costs per unit remains same and varies in…
Q: On December 15, 2022, LYCHEE Company purchased goods costing ₱ 100,000. The terms were FOB shipping…
A: FOB SHIPPING POINTS In FOB Shipping Points, When the Goods are Shipped to the Buyer then Ownership…
Q: AirQual Test Corporation provides on-site air quality testing services. The company has provided the…
A: Flexible budget performance report is the statement which is prepared in order to determine various…
Q: Wilco acquires a 90% interest in Seminole C book value of Seminole's identifiable net ass
A: To calculate the noncontrolling interest in net assets for 2022, we first need to calculate the net…
Q: a. On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,153,000 in cash.…
A: INTANGIBLE ASSETS Intangible Assets are those Assets which are not Visible. In other Intangible…
Q: Question Content Area Balances of the current asset and current liability accounts at the end and…
A: Cash Flow Statement - A statement of Cash Flow is a financial statement that includes the inflow and…
Q: 5. XYZ Industries, has the following information to be used in preparing its flexible budget: . The…
A: The flexible budget is based on standard costs and actual units. The net income is calculated as…
Q: odun
A: Dear student , “Since you have posted multiple questions, we will provide the solution…
Q: As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected…
A: To keep track of a business transaction, the business organization enters its transaction in the…
Q: Preble Company manufactures one product. Its variable manufacturing overhead is applied to…
A: Direct labor is the amount of cost incurred on the wage payment of the laborer who are directly…
Q: On October 1, 2020, CaPhe Vietnam sold a technology to Cafe Costa Rica for 15,000 costa rican colon.…
A: Initially Accounts receivables are recorded at spot rate.
Q: On January 2, 2023, Once Again Clothing Consignments purchased showroom fixtures for $19,000 cash,…
A: The Depreciation expense is charged on fixed assets as reduction in the value of the fixed assets…
Q: Self-employed individuals (including a partner in a partnership) and employees with other income…
A: Gazette forms are official tax forms that are published in the government's gazette, which is a…
Q: All of the amounts that have parentheses are incorrect. What do I need to do to calculate the…
A: Cash flow statement includes: Cash flows from operating activities Cash flows from investing…
Q: The traditional management accounting methods are not capable any more to provide the requirements…
A: Answer:- Management accounting meaning:- Managers use accounting data for decision-making as well…
Q: Under IAS7 operating cash flows can be shown using either the Direct Method or Indirect Method.…
A: The Direct Method and Indirect Method are two ways of presenting the operating cash flows section in…
Q: During March, Estes Company worked on three jobs. Data relating to these three jobs follow: Job 86…
A: Journal Entry is the primary step to record the transaction in the books of accounts. The increase…
Q: at is the journ
A: Journal entries typically include the date of the transaction, the accounts involved, the amounts…
In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis.
The balancing adjustment is:
$3,700,000
$4,500,000
$4,000,000
$3,200,000
Step by step
Solved in 3 steps
- On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910On 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.Using the sum-of-the-years-digits method, how much depreciation expense should Vorst record in 2020 for Asset B? a. 6,000 b. 9,000 c. 11,000 d. 12,000
- 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.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.
- 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. 10,000Gray 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.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.
- 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.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?