Logano Driving School's 2021 balance sheet showed net fixed assets of $2.4 million, and the 2022 balance sheet showed net fixed assets of $3.4 million. The company's 2022 income statement showed a depreciation expense of $309,000. What was net capital spending for 2022? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
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Logano Driving School's 2021 balance sheet showed net fixed assets of $2.4 million, and the 2022 balance sheet showed net fixed assets of $3.4 million. The company's 2022 income statement showed a
What was net capital spending for 2022? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
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- 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.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?AFN EQUATION Refer to Problem 16-1 and assume that the company had 3 million in assets at the end of 2019. However, now assume that the company pays no dividends. Under these assumptions, what additional funds would be needed for the coming year? Why is this AFN different from the one you found in Problem 16-1?
- It is the end of 2019 and you are an accountant for Stone Company. During 2019, sales of the companys products slumped and the companys earnings are expected to be much less than those of 2018. The president comes to you with an idea. He says, Our companys property, plant, and equipment cost 300,000, and that is the amount we usually report on our balance sheet. However, I just had these assets appraised by an independent appraiser, and she says they are worth 400,000. I think that the company should report the property, plant, and equipment at this amount on its December 31, 2019, balance sheet and should report the 100,000 increase in value as a gain on the 2019 income statement. If we use this approach, it will show how much our company is really worth and increase our earnings. This will make our shareholders happy. What do you think? Required: Prepare a written response to the president.Wallace Driving School’s 2020 balance sheet showed net fixed assets of $4.2 million, and the 2021 balance sheet showed net fixed assets of $5 million. The company’s 2021 income statement showed a depreciation expense of $205,000. What was net capital spending for 2021?Logano Driving School’s 2017 balance sheet showed net fixed assets of $4.2 million, and the 2018 balance sheet showed net fixed assets of $6 million. The company's 2018 income statement showed a depreciation expense of $955,000. What was net capital spending for 2018?
- Aurora Trucking's 2023 balance sheet showed net fixed assets of $2.4 million, while its 2022 balance sheet showed net fixed assets of $2.3 million. It's 2023 income statement reported depreciation expense of $240,000. How much did Aurora spend to acquire new fixed assets during 2023?For 2019, Nirvana Industries disclosed cash revenue of $12.0 million and cash expenses of $6.0 million, depreciation on plant and equipment of $2.0million and an effective tax rate of 21%. For 2019, Nirvana Industries had capital expenditures of $1.0 million to purchase manufacturing equipment and invested $850,000 in net working capital. What were the net (total) cash flows for Nirvana Industries in 2019? Round your answer to the nearest hundredth of million $During 2019, Bing Company constructed its own equipment costing P5,000,000. The weighted average accumulated expenditure on these assets during 2019 was P2,500,000. To help finance the construction, P1, 800,000 was borrowed at 10% on January 1, 2019, and funds not needed for construction were temporarily invested in short-term securities, yielding P45,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P2,500,000, 10-year, 9% notes payable dated January 1, 2019. What is the amount of interest that should be capitalized by Bing during 2019?
- New Life Manufacturing for year-end December 31, 2022, show an accounting profit after tax of $16,500,000 after charging the following: • Depreciation $2,500,000`• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000 • Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000 Other Information1. Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the CEO’s home. 2. The insurance was paid for the factory and office premises. 3. Loss on disposal of fixed assets $350,0004. Income Tax Refund of $700,000 was included as part of the entity’s income.5. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000.6. The company paid final ordinary dividends totaling $100,000.7. Repairs and maintenance…During 2020, Raines Umbrella Corp. had sales of $940, 000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $680,000, $85,000, and $165,000, respectively. In addition, the company had an interest expense of $53, 000 and a tax rate of 21 percent. (Assume that interest is fully deductible.) a. What was the company's net income or net loss for 2020? (Do not round intermediate calculations. Input your answer as a positive value.) b. What was its operating cash flow? (Do not round intermediate calculations.)On January 1, 2020, Seabreeze Construction Company owned 4 dump trucks, 2 excavators and other construction machinery with a total value of $950,000. During 2020, Seabreeze Construction bought two new trucks paying a total of $120,000. On December 31, 2020, the market value of all the firm's trucks and construction machinery was $1,020,000. 1) What was Seabreeze’s gross investment in 2020? 2) What was the amount of depreciation in 2020? 3) What was the net investment in 2020?
