During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following onJanuary 1 of the current years, prior to the disposal of the assets:Accumulated Depreciation(straight line)$15,750 (7 years)Original ResidualAssetMachine AMachine BMachine CCost$21,00050,000Value$3,0004,00075,0003,000EstimatedLife8 years10 years12 years36,800 (8 years)60,000 (10 years)The machines were disposed of in the following ways:a. Machine A: Sold on January 1 of the current year for $5,000 cash.b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the followingyear, plus 6 percent interest.c. Machine C: Suffered irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at nocost. The machine was insured, and $18,000 cash was collected from the insurance company.Required:1. Prepare all journal entries related to the disposal of each machine in the current year. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.)

Journal refers to a chronological record of financial transactions of a business. This is where…

Original Residual Asset Cost ine A $21,000 Value $3,000 Estimated Life Accumulated Depreciation (straight line) 8 years $15,750 (7 years) ine B 50,000 4,000 10 years Fine C 75,000 3,000 12 years 36,800 (8 years) 60,000 (10 years) achines were disposed of in the following ways: chine A: Sold on January 1 of the current year for $5,000 cash. chine & Sold on April 1 for $10.500: received cash $2.500 and note receivable fo

Original Residual Asset Cost ine A $21,000 Value $3,000 Estimated Life Accumulated Depreciation (straight line) 8 years $15,750 (7 years) ine B 50,000 4,000 10 years Fine C 75,000 3,000 12 years 36,800 (8 years) 60,000 (10 years) achines were disposed of in the following ways: chine A: Sold on January 1 of the current year for $5,000 cash. chine & Sold on April 1 for $10.500: received cash $2.500 and note receivable fo

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.
Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on April 1, Year 1. Calculate the depreciation for Year 1 and Year 2 using the double-declining-balance method. Round to the nearest dollar.
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
Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
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.
On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.