Required: Prepare the journal entries in the records of Yasmina Ltd to record the transactions and events described above as at 30 June 2020 and the sale o the furniture on 1 January 2021. Income tax rate is 30%.
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- (Appendix 11.1) Auburn Company purchased an asset on January 1, Year 1, for 150,000. The asset has a MACRS life of 7 years. The residual value of the asset is 35,000. Calculate the depreciation expense for Year 1 and Year 2 using MACRS.CORNERSTONE 2.1 Four statements are given below. Pewterschmidt Company values its inventory reported in the financial statements in terms of dollars instead of units Property, plant, and equipment is recorded at cost (minus any accumulated depreciation) instead of liquidation value. The accounting records of a company are kept separate from its owners. The accountant assigns revenues and expenses to specific years before preparing the financial statements. Required: Give the accounting assumption that is most applicable to each of the statements.Problem 1-583 Arrangement of the Income Statement Parker Renovation Inc. renovates historical buildings for commercial use. During 2019. Parker had $763,400 of revenue from renovation services and $5,475 of interest income from miscellaneous investments. Parker incurred $222,900 of wages expense $135,000 of depreciation expense, $65,850 of insurance expense, $109,300 of utilities expense, $31,000 of miscellaneous expense, and $61,400 of income taxes expense. Required: Prepare a single-step income statement for Parker for 2019.
- (Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company purchased equipment for 50,000. The equipment has an estimated residual value of 5,000 and an expected useful life of 10 years. Dinkle uses straight-line depreciation for its financial statements. Required: What is the difference between the companys income before taxes reported on its financial statements and the taxable income reported on its tax return in each of the first 2 years of the assets life if the asset was purchased on January 2, 2019, and its MACRS life is 5 years?QUESTION ONE The financial year of Company X starts from 1st. May every year. On 17th July 2022, X. ltd acquired the following non-current assets: Note: Land worth sh.990,000 (being part of 1,480,000) was acquired in cash, no land is on finance lease. The company's policy is to charge depreciation at the following rates: Cash/On Credit On Finance lease Hire Purchase Plant & Machinery 250,000 460,000 900,000 Land & Buildings 1,480,000 720,000 - Furniture 860,000 950,000 230,000 Motor vehicles 960,000 870,000 125,000 Other Fixtures & Fittings 654,000 620,000 860,000 Rate Land Nil Buildings 10 % on cost Plant and machinery 7% on reducing balance method. Motor vehicles, Fixtures & Fittings & Furniture 12% on reducing balance method. A proportionate charge is made in the year of purchase, sale, or revaluation of an asset. The following transactions took place: On 14th December 2022, the company decided to revalue its Land & buildings up to…Question 1Part 1A company resident in Trinidad and Tobago purchased the following assets in 2022: Asset Cost $ USDHonda Motor car purchased in May 2022 38,000Heavy Equipment 50,000Computer (CPU) 4,000Factory Buildings 72,000i. What would be the difference in capital allowances for 2023 if this company was resident in Jamaica instead of Trinidad and Tobago. (16 marks)ii. State two reasons for the difference. ( 2 marks)iii. Explain two circumstances in which obtaining capital allowances on the reducing balance basis may be more beneficial than on the straight-line basis. (2 marks).20 marks Part BOMG is in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the companyspent $2,000,000 to install solar panels for electricity in the building. The building was sold for $28,500,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal…
- PROBLEM 3 (No. 6 and 7 are based on the following problem) Panganiban Company acquired an equipment on January 1, 2023, costing the company P1,500,000. It was at revalued amount less any accumulated depreciation and accumulated impairment losses and transfers a portion of its revaluation surplus as the asset is used every period On December 31, 2023, the fair value of the asset was P1,687,500 and the company appropriately recorded its revaluation surplus. On December 31, 2025, the recoverable amount of the asset was determined to be P1,010,625 On December 31, 2026, the fair value of the asset was determined to be P1,095,000 5. What amount of revaluation surplus should be credited in equity on December 31, 2023? 6. What amount of impairment loss should be reported by Panganiban Company on December 31, 2025. hlam)QUESTION 3 MacPro Property Bhd acquired an investment property on 1 January 2015 and measured it using the cost model. On 1 January 2018, MacPro Property Bhd changed the accounting policy and used the fair value model to measure investment property. The acquisition cost of the property was RM70 million and the estimated useful life was 35 years. The fair values of the property were measured as below: Date RM (in million) 31/12/2015 72 31/12/2016 74 31/12/2017 78 31/12/2018 83 Profit after depreciation on investment property but before tax for 2017 and 2018 were RM80 million and RM95 million, respectively. Retained earnings brought forward on 1 January 2017 and 2018, were RM150 million and RM210 million, respectively. Assume that tax rate for 2017 and 2018 was 25%. REQUIRED: Discuss the accounting treatment of the above transaction in accordance to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Prepare the…Question # 6 Waqar is a sole trader. He provides the following financial information in respect of his business. Income statement for the year ended 31 December 2019 Sales 3380000 Cost of sales (2000000) Expenses (1200000) Profit for the year 180000 Statements of financial position at: 31 December 2018 31 December 2019 Non-current assets Freehold land 2000000 3500000 Plant and machinery at cost 900000 1020000 Less: depreciation (500000) (470000) Net book value 400000 550000…
- 3.1. Discuss the disclosure requirements for a change in accounting policy. 3.2. RT (LTD) purchased a plant for R3 000 000 on 1 January 2018. Depreciation – on a straight-line basis over 25 years Residual Value – R500 000 On 1 January 2022, the company reassessed the remaining useful life of the asset and calculated it to be 16 years and the residual value was changed to R250 000 Disclose the change in accounting estimate for the year ended 31 December 2022? 3.3. State the journal to correct the depreciation?Problem 5:On January 1, 2016, Greenhills Company acquired property, plant and equipment for each as follows:Cost Life in yearsLand 5,000,000Building 25,000,000 2513Machinery 10,000,000 5Equipment 3,000,000 10At the beginning of 2019, a revaluation of property items was made by professionally qualified valuers.While no change in the life of the assets was indicated, it was ascertained that replacement cost of theassets acquired in 2016 had increased by the following percentage:Land 100%Building 80%Machinery 50%Equipment 40%It was authorized that such revaluation be recorded in the accounts and that depreciation be recorded onthe basis of revalued amount.Required:a. Prepare journal entry to record the revaluation on January 1, 2019.b. Prepare the journal entry to record the depreciation for 2019.c. Prepare the journal entry to record the piecemeal realization of the revaluation surplus.d. Present the assets in the statement of financial position on December 31, 2019.Question 2 The extracts from the trial balance of Kandy as at 31 December 2018 are: GHC ‘000 GHC ‘000 Land (GHC 5million) and Buildings - at cost 55,000 Plant and Equipment - at cost 58,500 Accumulated Depreciation at 01 January 2018 : Buildings 20,000 : Plant and Equipment 34,500 The following information are also relevant: Non-current assets: The price of property has increased significantly in recent years and on 01 January, 2018, the directors are decided to revalue the land and buildings. The directors accepted the report of an independent surveyor who valued the land at GHC 8 million and the buildings at GHC 39 million on that date. The remaining life of the buildings at 01 January 2018 was 15 years. Kandy does not make an annual transfer to retained profits to reflect the realization of the revaluation gain. Plant and equipment is depreciated at 12½% per annum using the reducing balance method. No…