Muskoko Inc. purchased a property for $1.800,000 in 2022. The carrying value of property was $1,500,000 when it was required to be tested for impairment at December 31, 2026. The fair value at December 31, 2026 is $1,250,000 and the present value of future cash fows from the production facility was calculated as $1,056.000 at December 31, 2026, What is the total impairment of the production facilty, if any? Answers A -E A imparment gan of 8 5s000 B impairment loss of $ 250.000 C No impaiment pain or loss D Impairment gainof $ 300.000 E mparment loss of S 444,000
Q: The December 31, 2021 and 2020 comparative financial statements of ABC Company showed equipment with...
A: Depreciation is the allocation of cost of asset over the useful life of the asset. Accumulated depre...
Q: Use the accounts listed to create a multistep income statement
A: solution multistep income statement is a income statement in which we have to separately present the...
Q: Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income s...
A: Answer - Formula for Overall Contribution Margin Ratio - = Contribution Margin / Sales Overall ...
Q: Direct Materials, Direct Labor, and Overhead Variances, Journal Entries Rand Company produces dry f...
A: Direct Material- Direct material refers to the unprocessed materials that are directly used in the p...
Q: P Company acquired a 75% interest in S Company in 2018. S reported net income of P325,000 in 2020. D...
A: Consolidated financial statements are those financial statements which are prepared at the end of ac...
Q: orange cooperation a calendar year C cooperation, owns stock in white cooperation and has net operat...
A: A dividend is the distribution of a portion of a company's earnings to a specific group of sharehold...
Q: In 2020, Mr. Marangley, a dealer of car, disposed a brand new sports utility vehicle (SUV) which cos...
A: Monthly installments for 7 months P50,000 * 7 = P350,000 Sales - cost P1200,000 - P800,000 = P400,00...
Q: Statement 1: Under cash basis, if cash has been collected, revenue is recorded regardless of earning...
A: The accounting is based on different basis such as cash basis and accrual basis.
Q: 1. Bought furniture for 1,500 cash for business use. 2. Sold food for 800 on credit, the cost of pro...
A: 1. Accounting Equation - Accounting Equation is calculated using following equation - Assets = Liabi...
Q: 1. Lower of cost or market is used to value inventories. Choices: a. Full disclosure principle b. Ti...
A: As per The conservatism principle/constraint ignore all anticipated profit and provide for all possi...
Q: Blue Ridge Marketing Inc. manufactures two products, A and B. Preseitly, the compaliy uses a single ...
A: Lets understand the basics. There are two types of rates are followed for allocating fixed overhead ...
Q: An employee is about to receive the sum of P300.00 at the end of each year for 5 years.One year prio...
A: given An employee is about to receive the sum of P300.00 at the end of each year for 5 years. One ...
Q: 1. Harry potter invested a capital of 15,000 into his business. 2. Acquired an equipment for 5,000 c...
A: solution working note let us first journalize the transactions Harry potter invested a capital of 1...
Q: The following information was included in the bank reconciliation for Phillip Company for October an...
A: The calculation is given below.
Q: Job 123 was recently completed by BudolBudol Me Corporation. The following data have been recorded o...
A: The job cost is used to estimate the individual cost of the product. It includes both direct and ind...
Q: Which of the following income items may affect both Consolidated Net Income attributable to Parent a...
A: Consolidation Consolidation means the parent company taken over the shares of subsidiary company con...
Q: Consider the following data for two products of Vigano Manufacturing. Activity Budgeted Cost Activit...
A:
Q: Erle Company manufactures a mobile fitness device called the Jogging Mate. The company uses standard...
A: Hi student Since there are multiple subparts, we will answer only first three subparts.
Q: Sage Hill, Inc. leases a piece of equipment to Bucks Company on January 1, 2020. The contract stipul...
A: Lease is a form of agreement between two parties, under which one party provides its asset for use t...
Q: Keith is single with taxable income of $90,000. Use the 2021 tax rate schedule to calculate Keith's ...
A: Lets understand the basics. As per IRS, there are seven brackets for the calculation of taxes which ...
Q: Pantone Corporation is a calendar year taxpayer. Dave owns one-third (100 shares) of Pantone stock. ...
A: A dividend is a fee paid to the shareholders of a company. It is used by businesses to distribute pr...
Q: . A restaurant has traditionally used the straight line method to depreciate all its heavy duty kitc...
A: Solution Concept The information shall be fully disclosed in an financial statements so as to enable...
Q: 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 tot...
A: Net Sales = 20,00,000 Purchases = 12,00,000 Opening Inventory = 2,00,000 Closing Inventory = 3,00,00...
Q: O E1-23 Groovy Limited is a recording studio used by musicians to record music. It began 2020 with $...
A: Cash Flow Statement - Under Cash Flow, there are three types of activities involved - Operating Acti...
Q: car stuff.inc net sales-13,000 cost of goods sold-3,000 salary and wage expense-1,200 utility expens...
A: Gross profit = Net sales - Cost of goods sold Income from operations = Gross profit - operating expe...
Q: Y Corporation has daily collections of P180,000 from a selected foreign customer group. The bank off...
A: Solution Given Amount 130000 Current clearing time 8 days Reduced clearing time 3 ...
Q: On December 27, 20x1, YGS Co. received a sale order for a credit sale of goods with selling price of...
A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to...
Q: 1. Paid 1,000 cash to his payables. 2. Harry potter paid 150 cash for telephone bill. Choices: a.) A...
A:
Q: On January 1, 2021 Asset of ABC Company was P2,500,000 and its liabilities was P800,000. By December...
A: Solution Concept The increase / decrease in assets and liabilities can not give the implication abou...
Q: Among the account balance of Jeffrey Corporation at December 31, 2009 are the following: Patent Inst...
A: A patent is the granting of a property right to the inventor by a sovereign authority. This grant pr...
Q: Which circumstance is an example of why Congress established the nonrecognition of gain or loss when...
A: The circumstance that is an example of why congress established the recognition of gain or loss when...
Q: Account balances acquired from the Opulent Company's ledger on December 31, 2018 is shown below: Acc...
A: 1. Income Statement 2. Balance Sheet The first statement shows the income earned and loss incurred...
Q: In your own words, Explain the accounting cycle. 5 sentences only. No google and plagiarism.
A: Accounting Cycle - Accounting Cycles is the process of recording a transaction through different sta...
Q: t had an estimated u P60,000 in success g of 2019. the compa: Ee of its original paten
A: The carrying value computation as,
Q: You are tasked to perform cut-off procedures for expenses and its related payable. In testing the co...
A: cut-off procedures means all the transaction are recorded is relevant to current accounting period.
Q: first column to the last column in the lowest total cost. The number in each column represents the c...
A: The program is given as,
Q: V Corp. owns 70% of F Corp’s ordinary shares. On August 1, 2020, F Corp. sold a machine to V Corp. f...
A: solution concept The non controlling interest refers to the interest of the minority shareholders In...
Q: Jerely, Inc. had the following noncurrent asset account balance at December 31, 2019: Patent P1,920,...
A: Intangible Assets Intangible Assets are the assets that do not have any physical existence, that can...
Q: he local hamburger restaurant expenses all spatulas, french fry baskets, and other cooking utensils ...
A: Revenue recognize principle represents that the revenues would be recognized when it is certain that...
Q: Prepare a cash collections budget for March
A: Cash collections budget is an estimate of cash to be collected in a future period. The preparation o...
Q: Redlands Inc. sells one product for $5. The variable cost per item is $3, and the fixed costs for th...
A: Hi student Since there are multiple questions, we will answer only first question. Since first quest...
Q: Accounts payable, January 1 Accounts payable, December 31 Cash purchases during the year Payments on...
A: Solution: Purchases to be reported by first computing purchases on accounts. Then purchases on accou...
Q: The 2021 financial statement audit of OMG company began when the trial balance was received from man...
A: Answer: Given case: The schedule of liabilities to vendor showed that the company has only five supp...
Q: . ABC Corporation invested in one of DEF's ordinary shares that has a par value of P500 and a market...
A: solution concept in case ,the dividend does not grow we cannot use the Gordons growth model When th...
Q: Bridgeport Inc. has budgeted sales for the second quarter of $340,000 for April; $505,000 for May; a...
A: Cash budget is used in forecasting to determine supplier payment, receipts from customers which in t...
Q: A restaurant does not reduce the value of its glassware to liquidation value because of the ______ p...
A: While preparing accounting statements, there are some basic principles which are followed universall...
Q: Tamarisk Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 ...
A: Answer - Journal Entry in Lost Ark’s for 2019 - Date Particular Debit Credit Dec 31, 2019...
Q: Wynn Company reported revenue of P6,000,000 under the cash basis for the year ended 2020. Additional...
A: Accrual basis: Under accrual basis accounting, revenue and expenses are recognized when they are inc...
Q: Robinson Products Company has two service departments (S1 and S2) and two production departments (P1...
A: Calculation of missing information: S1 total cost allocation to P2 = 100% - 10% - 20% ...
Q: 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if...
A: Operating income refers to the income or gross profit generated by the company from its operations o...
Step by step
Solved in 2 steps with 2 images
- 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.Petes Petroleum, Inc., an SEC registrant with a calendar year-end, is in the business of constructing and operating offs] lore oil platforms. Petes Petroleum is required legally to dismantle and remove the platforms at the end of their useful lives, which is estimated to be 10 years. On January 1, 2019, Pete constructed and began operating an offshore oil platform off the coast of Brazil. The total capitalized cost to construct the platform was 3,700,000. In addition, while the future cost of dismantling the oil platform is difficult to estimate, Pete believes there is a 40% chance that the future cost will be 1,425,000, a 40% chance it will be 1,650,000, and a 20% chance that it will cost 2,125,000. The appropriate discount rate is 12%, and Pete uses the straight-line method of depreciation. Required: 1. Prepare the journal entries that Pete should record in 2019 related to the oil platform. 2. Prepare an amortization schedule for the asset retirement obligation. 3. Next Level Prepare a table showing the effect of accounting for the asset retirement obligation on assets, liabilities, shareholders equity, and net income relative to accounting for the associated costs at the end of the assets service life when the expenditure is made.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.
- At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.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.
- 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.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. 10,000Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?