The following balances were taken from the books of Alonzo Corp. on December 31, 2020. Interest revenue $ 86,000 Accumulated depreciation—equipment $ 40,000 Cash 51,000 Accumulated depreciation—buildings 28,000 Sales revenue 1,380,000 Notes receivable 155,000 Accounts receivable 150,000 Selling expenses 194,000 Prepaid insurance 20,000 Accounts payable 170,000 Sales returns and allowances 150,000 Bonds payable 100,000 Allowance for doubtful accounts 7,000 Administrative and general expenses 97,000 Sales discounts 45,000 Accrued liabilities 32,000 Land 100,000 Interest expense 60,000 Equipment 200,000 Notes payable 100,000 Buildings 140,000 Loss from earthquake damage 150,000 Cost of goods sold 621,000 Common stock 500,000 Retained earnings 21,000 Assume the total effective tax rate on all items is 20%. Instructions Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year.
The following balances were taken from the books of Alonzo Corp. on December 31, 2020. Interest revenue $ 86,000 Accumulated depreciation—equipment $ 40,000 Cash 51,000 Accumulated depreciation—buildings 28,000 Sales revenue 1,380,000 Notes receivable 155,000 Accounts receivable 150,000 Selling expenses 194,000 Prepaid insurance 20,000 Accounts payable 170,000 Sales returns and allowances 150,000 Bonds payable 100,000 Allowance for doubtful accounts 7,000 Administrative and general expenses 97,000 Sales discounts 45,000 Accrued liabilities 32,000 Land 100,000 Interest expense 60,000 Equipment 200,000 Notes payable 100,000 Buildings 140,000 Loss from earthquake damage 150,000 Cost of goods sold 621,000 Common stock 500,000 Retained earnings 21,000 Assume the total effective tax rate on all items is 20%. Instructions Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 5PA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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The following balances were taken from the books of Alonzo Corp. on December 31, 2020.
| Interest revenue | $ 86,000 | $ 40,000 | ||
| Cash | 51,000 | Accumulated depreciation—buildings | 28,000 | |
| Sales revenue | 1,380,000 | Notes receivable | 155,000 | |
| 150,000 | Selling expenses | 194,000 | ||
| Prepaid insurance | 20,000 | Accounts payable | 170,000 | |
| Sales returns and allowances | 150,000 | Bonds payable | 100,000 | |
| Allowance for doubtful accounts | 7,000 | Administrative and general expenses | 97,000 | |
| Sales discounts | 45,000 | Accrued liabilities | 32,000 | |
| Land | 100,000 | Interest expense | 60,000 | |
| Equipment | 200,000 | Notes payable | 100,000 | |
| Buildings | 140,000 | Loss from earthquake damage | 150,000 | |
| Cost of goods sold | 621,000 | Common stock | 500,000 | |
| 21,000 |
Assume the total effective tax rate on all items is 20%.
Instructions
Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year.
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