
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Waterway Industries purchased machinery for $1129000 on January 1, 2017. Straight-line
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- On January 1, 2014, Tanaka, Inc. purchased equipment for $27,000. Tanaka uses straight-line depreciation and estimates a 10-year useful life and a $3,000 salvage value. On December 31, 2021, Tanaka sells the equipment for $14,200. In recording this sale, Tanaka should reflect: Select one: a. A $1,400 gain b. A $1,600 gain c. A $3,000 gain d. A $6,400 gain e. None of the abovearrow_forwardSandhill company owns equipment that cost $120,000 when purchased on January 1, 2018. It has been depreciated using the straight line method based on estimated salvage value of $16,500 and an estimated useful life of 5 years. Prepare sandhill company's journal entries to record the sale of the equipment in these four independent situations. Sold for $59,000 on Jan 1, 2021 Sold for $59,000 on May 1, 2021 Sold for $38,500 on Jan 1, 2021 Sold for $38,500 on October 1, 2021arrow_forwardOn January 1, 2014, Bonita Industries purchased equipment at a cost of $361000. The equipment was estimated to have a salvage value of $10000 and it is being depreciated over eight years under the sum-of-the-years'-digits method. What should be the charge for depreciation of this equipment for the year ended December 31, 2021? $45125 $9750 $43875 $10028arrow_forward
- On January 1, 2022, Betty DeRose, Inc. purchased equipment for $86,000. The equipment was assigned a useful life of 12 years and a salvage value of $5,300. On January 1, 2026, Betty DeRose decided the life of the equipment should be changed from 12 to 18 years with a salvage value of $3,800 at the end of the 18 years. Betty DeRose uses the straight-line depreciation method to calculate depreciation on its long-term assets. Calculate the amount of depreciation expense recorded on the equipment for 2026.arrow_forwardHowarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $800,000. The residual value of the equipment was estimated to be $50,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $170,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. ces Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal No 1 Event 1 Cash Accumulated…arrow_forwardOn January 1, 2021, Slim Inc. purchased machinery for $350,000. The machinery had an estimated useful life of 10 years and a salvage value of $35,000. The company elected to use sum-of-years digits depreciation. At the beginning of 2025, Slim decided to switch to the straight-line method of depreciation and reassessed the remaining useful life of the machinery to be 4 years with no change in the salvage value. A change in depreciation methods together with a change in the useful life of the asset is Question 26Answer a. a change in accounting principle. b. an error correction. c. a change in accounting principle effected as a change in accounting estimate. d. a change in accounting estimate.arrow_forward
- Haystack company purchased a machine on January 1, 2015 for $48,000. The company estimates that the machine will have a $4,000 salvage value at the end of its 10 year useful life. On September 30, 2019 the machine was sold for a gain of $3,500. What must have been the selling price of the machine?arrow_forwardOn January 1, 2015, Jersey Corporation purchased for $800,000, equipment having a useful life of ten years and an estimated salvage value of $50,000. Jersey has recorded monthly depreciation of the equipment on the straight-line method. On May 1, 2020, the equipment was sold for $170,000. As a result of this sale, Jersey should recognize a gain/(loss) of?arrow_forwardEquipment was purchased for $83700 on January 1, 2021. Freight charges amounted to $4000 and there was a cost of $12000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $16000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2022 if the straight-line method of depreciation is used? O $16740. $13540. $28140. $33480.arrow_forward
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