(PPE) at December 31, 2021, and December
Q: xplain why net capital outflows and the real interest rate have an inverse relationship. Why do NCOs…
A: Explanation of Concept In the concerned problem we shall discussed about the relationship between…
Q: Cutter Enterprises purchased equipment for $99,000 on January 1, 2021. The equipment is expected to…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: The Engine Division provides motors for the Auto Division of a Company. The standard unit costs for…
A: Introduction:- Transfer pricing means to the prices of goods and services are exchanged between…
Q: Roeker Company provides information systems consultation services to large companies in the…
A: Formula: Bad debt expense = Credit sales x uncollectible percentage
Q: ABC Company prepares quarterly calendar interim financial reports. Entity sells goods and normally…
A: The calculation of warranty expense for the fourth quarter interim financial statements is shown…
Q: From the information given below, compute the time in days for the following notes: Date of Note Due…
A: In calculation of days and date we do not consider the date of note because internet do not pay for…
Q: A man planned of building house. The cost of construction is P500,000 while annual maintenance cost…
A: Capitalized cost refers to the present worth of cash flows which go on for an infinite period of…
Q: Bryant leased a land to Jose for a period of 11 years starting January 1, 2012 at an annual rental…
A: You have posted a multiple-part question, so as per our policy only the first three inter-linked…
Q: At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $51 million. At the…
A: Depreciation can be termed as a reduction in the value of an asset over its useful period when used…
Q: Space Ace Ltd makes candies for children. Materials are added at the beginning of the process and…
A: Process costing is one of the method of costing which is used in industries in which material has to…
Q: Computing and Analyzing a LIFO Liquidation Chide’s storage facility was shut down due to a strike…
A: When a company liquidates its inventory, the most recently bought inventory is sold first. When a…
Q: Which of the following statements about time value of money is not correct? Present value of…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Outline the factors that facilitated the emergence of early bookkeeping.
A: Book keeping refers to the preparation and maintenance of books of accounts for every business…
Q: A corporation has taxable income from operations of $1 million. In addition, it received $100,000 of…
A: Introduction: Income might take the form of cash, real estate, or services. Unless specifically…
Q: A corporation has taxable income from operations of $1 million. In addition, it received $100,000 of…
A: Corporations are the form of an organization having a separate legal entity created by law. The…
Q: Determining whether an amount is of a capital or a revenue nature forms part of the subjective test.…
A: The capital nature amount means the amount by which the company receives the amount. The capital…
Q: In a Master Budget, where the overhead allocation rate is based on direct labor hours, the…
A: Manufacturing overhead means all type of indirect costs being incurred on the production and…
Q: 5. A business-related transaction refers to regulatory requirements that a business entity must…
A: Business-related transactions shall appear in the Business or entity's Statement profit and loss a/c…
Q: Which of the following elements are used in calculating Costs in a Flexible Budget? a. Budgeted…
A: The flexible budget performance report is prepared to compare the actual data with flexible Budget…
Q: 4.2 Accounting Agency Corporation provides primarily two kinds of services: accounting and tax.…
A: Breakeven sales revenue is that level of sales at which business is only recovering it's fixed costs…
Q: ch he will provide snowplowing for the en ter which of the following entries? (Check Check all that…
A: John Grey collects cash for snow plowing for $ 12,000. There is an inflow of cash . The cash is for…
Q: $ 9.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead…
A: The minimum price to be charged for the special order will be based on the Relevant Cost. Relevant…
Q: A 7 year property class was purchased for $115,000. The owner took depreciation charges using MACRS…
A: It is the financial gain realized when the depreciable property was sold, which should be reported…
Q: 3: Company B purchases a vehicle on January 1st for $120,000. The vehicle has a useful life of 3…
A: Under double declining balance method, the depreciation is charged on the declining balance at…
Q: true or false: 21) The indivisible reserve of savings and credit cooperatives is NOT covered by…
A: Insurance is a contract in which the insured party undertakes to pay the insurer a set sum on a…
Q: On January 1, 2019, ABC Company purchased land at a cost of P 6M. the entity used the revaluation…
A:
Q: TV 10, a service business had the following information for the year 2018: Service Revenue –…
A:
Q: Calculate the yield to maturity of both bonds. All else being equal, explain which bond the issuing…
A:
Q: wnership of an apart
A: The balance sheet is prepared as,
Q: This tax year, Jack and Jill file married filing jointly. Their modified taxable income is $375,000.…
A: Introduction: Earned and unearned income are both taxable. Unearned income that is taxed includes…
Q: CabuWarcester Ltd provides office supplies to businesses throughout the UK. Preparation of its…
A: Statement of profit and loss- Statement of profit and loss indicates how the revenues are distorted…
Q: An employer maintains pension trust for its employees. The following information are made:…
A: Only current year service costs are deductible.
Q: Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per…
A: Contribution margin is the difference between sales revenue and the variable expenses. It does not…
Q: 1 What is the chronological sequence of how a bond deal is executed? Review Later Origination >…
A: The sequence of bond deal execution is 1) Origination 2) Syndication 3) Sales & trading
Q: Question Content Area
A: Assets are resources that are controlled which results from prior transactions that are expected to…
Q: The auditor asked for the general information sheet of the company. Which of the following assertion…
A: An auditor is a person who audits the books of the company. The auditor is an authorized person who…
Q: hrough two producing departments. Model A's production is much more labor- ntensive than Model B's.…
A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: An S corporation distributes land with a basis of $60,000 and a FMV of $90,000 to its sole…
A: Tax is a liability that is calculated on the income earned by the company or individual. It is paid…
Q: Yamato Company’s 2019 fixed manufacturing overhead costs totaled Php120,000 and variable selling…
A: Under the variable costing method, product costs are those costs which are variable and related to…
Q: After closing the books at month end on June 30, 2020, Slayter Corporation's shareholders' equity…
A: Stock dividend is the distribution of dividend in the form of shares of the company. Stock split…
Q: 4597 Campbell Ave. Campbell, CA 95008 Barbara’s office is located at 6578 Hamilton Ave.
A: Tax can be defined as the charge levied by the government of the country based upon the incomes or…
Q: What accounts would appear in all companies? What accounts would be specific to each business?
A: Introduction: Every organisation/ company prepared the business accounts as per the nature of…
Q: Problem 1 A P 6, 000.00 was lent at 6% simple interest for 4 years. At the end of 4th year, the…
A: Under simple interest, interest is always calculated on the principal amount. Under compound…
Q: customer misses his flight due to the one hour wait in the check-in line. They are a
A: When there is case of error there is need to be rectify this error and provide the alternative…
Q: Required information (The following information applies to the questions displayed below.] Gerald…
A: Introduction: Individuals, corporations, and other legal organisations are all subject to the…
Q: Determine the following: 1. Record the adjusting entry for the year December 31, 2020 under the…
A: Adjusting entries are those journal entries which are passed at the end of the period for the…
Q: 53,600 equivalent units for direct materia 48,800 equivalent units for direct labor; _nd 42,000…
A: Given in the Question During October : cost of ; Direct materials = $158,688 Overhead = $85,200…
Q: Transcribed Image Text: You have been hired as a financial manager by Alpha Company which sells…
A: Optimal Level of Saftey The term "optimal stock" refers to the stock level that is the most…
Q: JIN Corporation started a promotional program. A towel is offered as a premium to customers who se…
A: Business transaction analysis. The following are the four stages of business transaction analysis:…
Q: Lacy is a single taxpayer. In 2021, her taxable income is $42,800. What is her tax liability in each…
A: a) 10% x $9950 + 12% x ( $40525 - $9950) + 22% x ($42800 - $40525) =$995 + $3669 + $500.5 =$5164.5…
Step by step
Solved in 2 steps
- 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.Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000On 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
- On December 31, 2019, Vail Company owned the following assets: Vail computes depreciation and amortization expense to the nearest whole year. During 2020, Vail engaged in the following transactions: Required: 1. Check the accuracy of the accumulated depreciation balances at December 31, 2019. Round to the nearest whole dollar in all requirements. 2. Prepare journal entries to record the preceding events in 2020, as well as the year-end recording of depreciation expense. 3. Prepare an Accumulated Depreciation account for each category of assets, enter the beginning balance, post the journal entries from Requirement 2, and compute the ending balance.Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.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.
- 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?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.Investing Activities and Depreciable Assets Verlando Company had the following account balances and information available for 2019: During 2019, Verlando recorded the following transactions affecting these accounts: a. Land with a carrying value of 35,000 was sold at a loss of 6,000. b. Land and equipment were purchased with cash during the period. c. Equipment with an original cost of 20,000 that had a book value of 4,000 was written off as obsolete. d. A building with an original cost of 60,000 and accumulated depreciation of 25,000 was sold at a 23,000 gain. e. Depreciation expense and amortization expense were recorded. f. Net income for the year was 60,000. g. A patent was acquired during the year in exchange for 1,200 shares of common stock with a par value of 1 per share and a market value of 26 per share. h. Additional marketable securities wefe purchased during the year. i. Verlando Company has no notes payable in the liabilities section of its balance sheet. Required: 1. Next Level Assuming that Verlando uses the indirect method to determine operating cash flows, what is the amount of depreciation expense and amortization expense that would be added back to net income: 2. Prepare the investing activities section of the statement of cash flows for the year ended December 31, 2019. 3. Prepare the disclosure for significant noncash transactions for the statement of cash flows for the year ended December 31, 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.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.