What is the amount of gain or loss to be recognized by WAVY Company in its income statement as a result of reclassification?
Q: A manufacturing company has been working with one of its primary suppliers to improve the quality of...
A: Cost of Quality refers to costs incurred with respect to a product to assure its quality such as pre...
Q: Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold to th...
A: A manufacturing overhead cost variance refers to the difference between the cost budgeted during the...
Q: Q1. On a multiple-step income statement, the excess of sales over the cost of goods sold is called: ...
A: A Multiple-Step Income Statement is an Income Statement which categorize income and expenses into op...
Q: Operating expenses on the income statement for financial reporting included $10,000 of advertising c...
A: calculation of variable advertising cost per unit are as follows
Q: Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm ...
A: Formula: Break even point in units = fixed cost / Unit contribution margin
Q: Accounts payable, 31 December 2016 $50 000 Accounts payable, 31 December 2017 $80 000 Inventory, 31 ...
A: Calculation of Cash paid to supplier Cash paid to supplier = Beginning accounts payable + Purchases ...
Q: Which statement of financial position accounts are most affected by financing activities? a. Non-c...
A: Changes in non current assets are reflected in cash flow from investing activities Changes in non cu...
Q: Parent Company acquired 15% of Subsidiary Company’s common stock for P500,000 cash and carried the i...
A: Acquisition of 15% share value is P500,000 The parent company has the 60% of shares in the subsidiar...
Q: Which of the following is not one of the lease classification tests? Purchase option Lease term Tr...
A: Solution: Following are the lease classification tests based on which lease is classified as finance...
Q: Cash $ 14,890 Cash withdrawals by owner $ 930 Accounts receivable 12,820 Consulting revenue ...
A: The balance sheet shows the financial position of the company which includes the assets, liabilities...
Q: Carter Company uses a weighted average process costing system. Material is added at the start of pro...
A: Total units = Beginning units + Units started = 4,500 + 13,000 = 17,500
Q: 6. Compute gross wages due to each employee under federal wage-hour law: a. Nona is a salaried emplo...
A: Gross Wages: Gross wages are the representative's profit before expenses and derivation portions. It...
Q: The following data are based on information in the 2019 annual reports of Abercrombie & Fitch, Compa...
A: Net income = Revenue - Expenses Dividend are paid from the net income of the year Retained Earning =...
Q: Disk City, Inc., is a retailer for digital video disks. The projected net income for the current yea...
A: Formula: Break even point in units = Fixed cost / unit Contribution margin
Q: Mara Company reported the following accounts on December 31,2021: Premium on bonds payable 50,000 ...
A: Bond refunding refers to when higher-cost bonds are paid off with debt that has a lower net cost to ...
Q: Acklin Company has two products: A and B. The annual production and sales of Product A is 600 units ...
A: In this question, we will calculate the predetermined overhead rate (i.e., activity rate) for Activi...
Q: PROBLEM 2: (CHANGE IN ACCOUNTING POLICY) Shilo Co. has been using the weighted average method of inv...
A: Accounting policy: Accounting policy includes those accounting methods, rules, concepts, and princip...
Q: n a finance lease, the lessee records interest expense only. lease expense only. amortization expe...
A: Solution: Finance lease is the giving right to use the asset along with the buy option at the end of...
Q: On January 1, 20x1, HALOHALO Company granted 1,000 share options to each of its 100 key employees co...
A: It is assumed that the par value of share option is P10 Share premium per share option= P60-P10 = P5...
Q: What is the adjusted amount of shareholders’ equity that should be reported by REBOND in its Decembe...
A: The question is related Shareholder's equity as on December 31st, 2021. Inventory will be Valued at...
Q: Which of the following is not a category of financial assets under GAM? Group of answer choices A.H...
A: Financial Assets are to be classified in the following four categories: 1. Financial Assets at fair ...
Q: what is income before income taxes ?
A: Income tax is a type of tax levied by governments on income earned by businesses and individuals wit...
Q: Please describe the reporting of preferred stock consistent with the U.S. GAAP
A: Preferred stock is generally recorded at fair value and should be recognised on its settlement date ...
Q: Differentiate between the mechanisms of an “actual costing” budgetary system against a “normal costi...
A: Budgetary system is the system which is applied by the company in order to be on track and within th...
Q: An objective of the statement of cash flows is to disclose changes during the period in all asset ...
A: The cash flow statement is part of the financial statements of the company. It is prepared at the en...
Q: On January 4, 2021, P Company purchased 75% interest in S Corporation for P300,000. S's recorded ass...
A:
Q: Statement 1: The relationship between operating leverage and financial leverage is always multiplica...
A: Debt: It implies to the amount that is borrowed by an individual or group to fund the financial need...
Q: In the bottom-up approach basically uses historical data from similar engineering projects to estima...
A: The correct option with proper explanation are as follows.
Q: During 2020, William purchases the following capital assets for use in his catering business: New pa...
A: Depreciation: The word "depreciation" refers to an accounting procedure that is used to spread the c...
Q: Precilla, vice-president of operations for Sturgis National Bank, has instructed the bank's computer...
A: No ,Precilla is not behaving in professional manner. It has an impact on stakeholder interests. Ac...
Q: National Co. sells three products: AB, CD and EF. AB is the most profitable product while EF is the ...
A: Break Even Point for multiple products is Calculated by dividing total fixed cost by weighted averag...
Q: (a) Discuss the nature of this lease in relation to the lessor. This is a ...
A: Lease refers to a contract between two parties under which one party who is the real owner of an ass...
Q: Bulldogs Inc.'s capital structure consists of 40% long-term liabilities, 30% preferred stock, and 30...
A: Information Capital Ratio Cost of capital Long-term liabilities 40% 10% Preferred stock 30% 1...
Q: Which of the following budgets are prepared before the sales budget? Budgeted Income Statemen...
A: Sales budgets are financial plans that forecast a company's overall income for a certain time. Compa...
Q: The graph shows Global revenue for smart phones. A company has a 35% marketshare in 2019. What is an...
A: Here we will make use of the graph and first see what is the overall revenue for 2020.
Q: How much is capital credited to D at the time of formation of the partnership? To input answers, kin...
A: The non cash assets invested by partners are recorded at fair value in the market instead of book va...
Q: 1 Rahat is a trader. The following transactions took place in March 2021. March 3 Cash sales, $580, ...
A: Three columnar Cash book is the ledger inclusive of three column discount, cash and bank. It has the...
Q: If National Co. treats the AB Division as an investment center for performance measurement purposes,...
A: Before tax ROI = Income before tax/ Average investment in total assets Before tax ROI = 400,000/ 2,4...
Q: Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch of ...
A: The predetermined overhead rate is calculated as estimated overhead cost divided by estimated base a...
Q: PR 18-5B Statement of cost of goods manufactured and income statement for a OBJ. 2, 3 manufacturing ...
A: Cost of Goods Manufactured: It is possible to compute a company's overall manufacturing expenses for...
Q: Revise your worksheet to reflect the following transactions and updated values at the end of the acc...
A: Bank reconciliation is the process of comparing the balances in an entity's accounting records for a...
Q: your given the following information about a home loan: loan amount 300000 number of years 25 years ...
A: The internal rate of return in banking industry is the rate of return at which the present values of...
Q: Grouper Company has not yet prepared a statement of cash flows for the 2020 fiscal year. Comparative...
A: The cash flow statement is prepared to record the cash flow from various activities during the perio...
Q: Product W4 $16,000 $5,920 lle expenses xpenses for the entire company were $42,760.
A: Overall Break even point = total fixed cost/ weighted contribution Margin Overall Break even point ...
Q: Comparative balance sheet accounts of Sage Inc. are presented below. SAGE INC. COMPARATIVE BALANCE ...
A: Cash flow statement is a financial statement that provides aggregate data regarding cash inflows a c...
Q: National Inc. has been hit hard due to pandemic. The company’s analysts predict that earnings and d...
A: Answer) Formula: Price of share today = Next Expected Dividend/ (Cost of Equity – Growth rate) C...
Q: s net capital gain c
A: ATRIG corporation sold some of its Capital Assets and Derived Gain / Loss from its.
Q: Martin Company purchases a machine at the beginning of the year at a cost of $155,000. The machine i...
A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by u...
Q: HO operates a branch in Makati. On October 31, 2017, the Branch Current account had a balance of P30...
A: The correct answer for the above question is given in the following steps for your reference
Q: Bulldogs Inc.’s capital structure consists entirely of long-term debt and common equity. The cost of...
A: Calculation of Proportion of Debt in the capital Structure Proportion of Debt = 100% - proportion ...
What is the amount of gain or loss to be recognized by WAVY Company in its income statement as a result of reclassification? (If gain, leave the numerical figure positive; if loss, put a negative (-) sign before the numerical figure)
Step by step
Solved in 2 steps
- 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.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.At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
- 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 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. 10,000Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
- Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.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.At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 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 for each situation to record the depreciation for 2020. Ignore income taxes.