Nixon
Q: Cost of Sales Operating Expenses (b) Sales Gross Profit Net Income P75,000 (a) P40,000 P17,000
A: Formula used: Net income = Gross profit - Operating expenses. Deduction of operating expenses from…
Q: Prepare the adjusting entries required by the following information made available to you December…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…
Q: What is the appropriate name of the error which was made under the following circumstances: A…
A: There are different types of errors that occurs 1. Error of Original Entry In this, the original…
Q: The following data are given on the sole product of Silva Corporation: Unit Selling Price P 800;…
A: Formulas: Break even sales (Units) = Fixed costs / Contribution Margin per unit Break even sales…
Q: Dexter Industries purchased packaging equipment on January 8 for $392,400. The equipment was…
A: Depreciation: - Depreciation is the reduction in the value of asset as its use or wear and tear…
Q: rying receivables? What costs are associated with not granting credit? What do we call the sum of…
A: Receivables are debts owing to a firm by its customers for goods or services that have been provided…
Q: On July 1, 20X1, ABC Corp received a P450,000 10% 3-year note from a customer. The principal and…
A: Interest Receivable at Dec 31, 20X1 = Face value of the note x Rate of Interest x No. of months…
Q: The following information about ABC Company is available at December 31, 2020: Employee income…
A: Current Liabilities are those liabilities and obligations which needs to be settled in short period…
Q: 1. At January 1, 2019, Marion Company had 400,000 shares of common stock issued and outstanding,…
A: Earnings per share are the amount that is earned by the equity shareholder on each share in which…
Q: Class Discussion No. 3 Please review the following information and explain the "total expense" for…
A:
Q: Given: Below are some data of the Income Statement accounts of Wishing Well Company for the year…
A: Cost of goods sold = Cost of goods available for sale - Ending Inventory where, Cost of goods…
Q: kelly’s Fitness Center purchased a new step machine for $16,500. The apparatus is expected to last…
A:
Q: Given: Below are some data of the Income Statement accounts of Wishing Well Company for the year…
A: Solution: Net purchases = 611,340 Merchandise available for sale = 798,400 Merchandise available for…
Q: On January 1, Year 2 Boothe Company paid $12,000 cash to extend the useful life of a machine. Which…
A: Capitalization of expenses in connection with the fixed assets should be done if they increase their…
Q: What are the short and longer consequences of recognising cable revenue costs as capital spending
A: A company's capital expenditures (CapEx) are cash outlays for the purchase, improvement, and…
Q: Assignment: Present entries to record the following for a business that uses the Allowance Method:…
A: Adjusting entries are the one which are prepared at the year-end to rectify the errors and omissions…
Q: 3. Question Content Area Cash Budget Khloe Company imports gift items from overseas and sells…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: 2. Explain how information asymmetry causes market failure in the market for accounting information.
A: Accounting information is the information regarding the company of the financial statements and the…
Q: 1. Explain the difference between the social role of accounting and the traditional role of…
A: The Accounting is an art of identification, recording, summarizing, analysing and interpretation of…
Q: Cash Budget Janet Wooster owns a retail store that sells new and used sporting equipment. Janet has…
A: A cash budget is a budget prepared at the beginning of the period that includes the cash to be spent…
Q: On Jan 1, 20X1, ABC Corp received a P450,000 3-year note from a customer. The principal and interest…
A: The note seems a zero-interest note receivable. In a zero-interest note receivable the interest…
Q: The following attributes are correct in respect of accounting equation except one of them: O a.…
A: Accounting equation is simply the basic of double entry book keeping of accounting. It shows the the…
Q: Anne LLC purchased computer equipment (five-year property) on August 29, 2018 for S36,000 Anne LLC…
A: Introduction:- Depreciation expense is a non-cash expense. which is charges on fixed assets. Fixed…
Q: help me identify if this is an asset, expense, withdrawals, liability, revenues - a written promise…
A: Asset is the useful thing we have us like property, car, machines. These are valuable things that…
Q: Trumbull Co. plans to produce 100,000 toy cars during September. Planned production for October is…
A: Raw material purchase budget is prepared with a view to estimate the cost of total material required…
Q: Determine the selling price for goods sold on credit
A: All other information are not required. Cost of goods sold on credit and profit percentage are given…
Q: Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects…
A: Working Note: Income tax expense = Income tax expense x tax rate = $4,140,000 x 40% = $1,656,000
Q: Name the error which was made under the following circumstances: the business sold goods on credit…
A: The accounting is a process to record the transactions on the regular basis in the four column…
Q: Required information [The following information applies to the questions displayed below] The Field,…
A: Liquidation seems to be the process whereby a corporation is wound up. In addition, the company's…
Q: Given: The 456 Company purchased office supplies from A-One Supplies worth P124,000 on July 06,…
A: In the given question, A-one Supplies has offered a trade discount of 15% and 10%: It implies that…
Q: Companies X, Y and Z, parties to a consolidation, have the following data:…
A: Issue of shares or stock is one of the important source of finance being used by the business. These…
Q: On January 2, 2030, Esko Corp. acquired all the net assets of Tolits Inc. Esko Corp. paid P6,000,000…
A:
Q: a. What is the net present value of the project? (Negative amount should be indi factor to 3…
A: Net Present Value It is the difference between the present value of the cash inflows and present…
Q: TWENTYFIRST Corporation a manufacturer of cleaning products is preparing annual financial statements…
A: If the contingent liability is likely to occur and the amount can be reasonably estimated, the same…
Q: Garcia Company issues 10.5%, 15-year bonds with a par value of $430,000 and semiannual interest…
A: Issuance of Bond: It is possible for businesses to raise funds by issuing bonds. In the case of…
Q: On February 5, 2021, an employee filed a P2,000,000 lawsuit against ABC Company for damages suffered…
A: Liabilities are the obligations or dues that needs to be paid out or settled by the business. It can…
Q: For a year, a company hires two employees and rents 15 acres of land. It yields 150,000 bushels of…
A: Introduction:- A firm will have increasing returns to scale if the output increases more than the…
Q: Virtual banks are subject to the same set of supervisory requirements applicable to conventional…
A: Virtual banking is the act of gaining online access to banking organizations and their services…
Q: On January 1, 2021, Bongbong Company received a consolidated grant of P12,000,000. Three-fourths of…
A: Given data: - Amount of grant=12,000,000 Grant for college building= 3/4th of total grant Life of…
Q: Golf Trends is an importer of a wide variety of Cleveland golf products. On 1 November 2018 the…
A:
Q: Required: Prepare Income Statement. Reflect in the income statement the net sales, net purchases,…
A: Income statement is one of the financial statement being prepared for measuring profitability of the…
Q: A motorcycle can be purchased for $8700 or leased for a down payment of $600 and $280 per month.…
A: Solution:- Given, A motorcycle can be purchased = $87,700 or, Leased for a down payment = $600 and…
Q: Use the following information for questions. The following items are taken from the financial…
A: Income statement represents the net income of the company. Balance sheet represents all the assets,…
Q: On July 1, 2020, PHILIPMORRIS grants a 5-year P5,000,000 non-interest bearing advance to its…
A: Lets understand the basics. When any advance is given which is non interest bearing then it needs to…
Q: Triple J business has installed prepaid electricity unit equipment. At the end of the accounting…
A: Lets understanding the basics. Adjusting entry is passed at the year end to record correct amount of…
Q: A building with a cost of $900,000 has an estimated residual value of $360,000, has an estimated…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: Brittany purchased a building for $320,000 on January 1, 2013. The purchase price does not include…
A: Introduction: Under the cost recovery technique, a company does not report any profits from a…
Q: can you please explain this adjusting entry that occured per letter (letter A, B, C) i kind of dont…
A: Adjusting entries are those journal entries which are passed at the end of the period in order to…
Q: 3. Complete the table. Round all amounts to the nearest dollar. Approximate Net Pay as Percent of…
A: Weekly earnings can be calculated per week, It means your earnings from your employer determined by…
Q: Create a general journal for each transaction December 17: Byte was informed that Mr. Madoff who has…
A: Journal entry is the primary step to record the transaction in the books of account. The journal…
The company undertook all the necessary actions to be able to classify the asset as held for sale. On September 30, 2020, Nixon estimated that it could sell the plant at its fair value of P4,900,000 after incurring estimated selling costs of P400,000.
On December 20, 2020, Nixon Company sold the plant for P4,950,000 and paid disposal costs of P350,000.
How much Is the gain on sale of Maguindanao plant?
Step by step
Solved in 2 steps with 2 images
- 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.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.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 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.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?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. 10,000
- 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.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.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.
- 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.Comprehensive: 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?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.
