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- Vorst depreciates Asset A on the double-declining-balance method. How much depreciation expense should Vorst record in 2020 for Asset A? a. 32,000 b. 25,600 c. 14,400 d. 6,400A company purchased a building twenty years ago for $150,000. The building currently has an appraised market value of $235,000. The company reports the building on its balance sheet at $235,000. What concept or principle has been violated? A. separate entity concept B. recognition principle C. monetary measurement concept D. cost principleCapstone Consulting Services acquired land 5 years ago for $200,000. Capstone recently signed an agreement to sell the land for $375,000. In accordance with the sales agreenwnt, the buyer transferred $375,000 to Capstone’s bank account on February 20. How would elements of the accounting equation be affected by the sale?
- Spreadsheet The following 2019 information is available for Payne Company: Partial additional information: The net income for 2019 totaled 1,600. During 2019, the company sold, for 390, equipment that cost 390 and had a book value of 300. The company sold land for 200, resulting in a loss of 40. The remaining change in the Land account resulted from the purchase of land through the issuance of common stock. Required: Making whatever additional assumptions that are necessary, prepare a spreadsheet to support the 2019 statement of cash flows for Payne.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.Assets Acquired by Exchange Bremer Company made the following exchanges of assets during 2019: 1. Acquired a more advanced machine worth 10,000 by paying 2,000 cash and giving up a machine that had originally cost 40,000 and has a book value of 12,000, 2. Acquired a building worth 55,000 by paying 5,000 cash and giving up a piece of land that had originally cost 35,000. 3. Acquired a more advanced machine worth 20,000 by paying 5,000 cash and giving up a machine that had originally cost 13,000 and has a book value of 11,000. 4. Acquired a car by giving up a truck that had originally cost 20,000, has a book value of 15,000, and has a blue book value of 16,800. In addition, the company received 1,000 cash. Required: Prepare Bremers journal entry for each exchange. Assume all exchanges were determined to have commercial substance.
- Depreciation On July 1, 2016, Dexter Corp. buys a computer system for $260,000 in cash. Assume that the computer is expected to have a four-year life and an estimated salvage value of $20,000 at the end of that time. Required Prepare the journal entry to record the purchase of the computer on July 1, 2016. Compute the depreciable cost of the computer. Using the straight-line method, compute the monthly depreciation. Prepare the adjusting entry to record depreciation at the end of July 2016. Compute the computers carrying value that will be shown on Dexters balance sheet prepared on December 31, 2016.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. $224,000Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
- Determining Cash Flows 1from Investing Activities Airco owns several aircraft and its balance sheet indicated the following amounts for its aircraft accounts at the end of 2019 and 2018: Required: 1. Assume that Airco did not sell any aircraft during 2019. Determine the amount of depreciation expense for 2019 and the cash spent for aircraft purchases in 2019. 2. If Airco sold for cash aircraft that cost $4,100,000 with accumulated depreciation of $3,825,000 producing a gain of $193,000, determine (a) the amount of depreciation expense, (b) the cash paid for aircraft purchases in 2019, and (c) the cash inflow from the disposal of aircraft.Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?Adjustment for depreciation The estimated amount of depredation on equipment for the current year is $133,000. a. How is the adjustment recorded? Indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease. b. If the adjustment in (a) was omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of December 31?