What is the purpose of the valuation allowance?

Q: Bu Co. is being sued for illness caused to local residents as a result of negligence on the company'...

A: Answer: a. a loss contingency of P 4,800,000 and disclose an additional contingency of up to P 3,200...

Q: Jane wants to buy a new car but has decided that by the time she saves $33000 to buy the new car she...

A: Option 1- Loan from Bank: Annual Interest Rate  8.50% Years 4 Payment per year 1 Amount 330...

Q: A new product introduced by Beauty Promotions carries a two-year warranty against defects. The estim...

A: The warranty liability is the expense due as per estimation but not demanded by customer yet. 

Q: Townson Company had gross wages of $200,000 during the week ended December 10. The amount of wages s...

A: Social Security tax payable = Gross wages × 6% = $200, 00×6% = $12, 000  

Q: 3. The current assets of Mayon Enterprise consists of cash, accounts receivable, and inventory. The ...

A: Cost of goods sold is the amount of cost for the goods which are sold. It shows the cost for making ...

Q: Cullumber Company owns delivery equipment that cost $53,800 and has accumulated depreciation of $27,...

A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three sub...

Q: F, a partner in FU Partnership, has a 30 percent share in partnership profits and losses. F’s capita...

A: Calculation of Net income of the firm for 2018 Net Income of the firm = F’s share in Net Income/ F’s...

Q: Tech Manufacturing Company realized P15,000,000 in sales, with a cost of goods sold of P6,000,000, g...

A: The ratio analysis helps to analyze the financial statements of the business. The Return on assets i...

Q: Prepare a budgeted income statement using the information shown. Sales (units) Sales price per unit ...

A: A budgeted income statement is a financial report that details the expected profit, revenue, and cos...

Q: Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years a...

A: Impairment loss is the decrease in the carrying amount of asset to its recoverable amount. Recoverab...

Q: Sylvestor Systems borrows $181,000 cash on May 15 by signing a 180-day, 6%, $181,000 note. 1. On wha...

A: Answer 1) Calculation of maturity date of notes payable Maturity date of note = Issue date of note +...

Q: After analyzing the data, prepare a classified balance sheet for JB's Auto Shop as of December 31, 2...

A: Solution Balance sheet Balance sheet is a statement of financial position of an organization as on s...

Q: Quick assets                                                               P208,000    Acid test ra...

A: Current ratio = Current Assets / Current Liabilities Quick Assets = Quick Assets / Current Liabiliti...

Q: Instructions Journal Creative Images Co. offers its services to individuals desiring to improve thei...

A: General Concepts regarding Closing entries: #1:Temporary accounts, like Revenue accounts, have n...

Q: A company has two product cost centres: the Moulding Department and the Cutting Department. Details ...

A: Overhead rate = Total overhead costs /Total direct machine hours Overhead cost for one unit of Produ...

Q: Financial Statements from the End-of-Period Spreadsheet Bamboo Consulting is a consulting firm owned...

A: The financial statements are prepared in order to show the operating performance of the business and...

Q: Company H started its operations in 2021 and made the following asset purchases:   asset   purch...

A: GIVEN   Company H started its operations in 2021 and made the following asset purchases:   ...

Q: Bank Reconciliation The following data were accumulated for use in reconciling the bank account of N...

A: A bank reconciliation statement is prepared by the management at a particular time period. It helps ...

Q: Date of lease – 7/1/19 Term – 3 years (expires 7/1/22) Semi-annual lease payments of $100,000 every ...

A: Answer:- present value of the lease payments Implicit rate of interest to be taken if it is readi...

Q: e process and heated an to the Molding departn ation relates to the blendi process, November 1,

A: No. Of actual units and equivalent units                      Particulars  Paraffin   Pigment   ...

Q: Which of the following statements is incorrect? O If the current ratio is too high the company may n...

A:

Q: 1. Mr. Francisco, an employee of ACE Corporation, decided to retire after ten (10) years of service ...

A: Taxable income is that the portion of your gross income wont to calculate what proportion tax you ow...

Q: The HEYBM CORPORATION presented the following in order to aid the accountant in preparing the CFS (D...

A: Solution Concept There are two methods of preparing cash flow statement , direct and indirect method...

Q: On January 1, 2019, Bridgeport Inc., a construction company, leased an excavator from Leaselt Inc. T...

A: Calculation of initial measurement of Right-of-use Asset and liability: Year PV factor @ 6% Annua...

Q: Exerclse 8-14 Ordinary repalrs, extraordlnary repalrs, and betterments LO C3 Oki Company pays $250,5...

A: As per IAS 16, Property plant and equipment An expenditure incurred to increase the productivity of ...

Q: Andres, VAT-registered real estate dealer, transferred a parcel of land held for sale to Camella Rea...

A: The transaction in the real estate are subjected to VAT and all transactions of sale types are subje...

Q: Sweet Tooth Candy Company has computed the net present value for capital expenditure at two location...

A: The question is based on the concept of Financial Management.

Q: Balance sheet preparation Use the appropriate items from the following list to prepare in good form​...

A: Solution Working note Calculation of net income Sales Revenue 3564 Less cost of goods sold...

Q: The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively....

A: Please see Step 2 for the solution as required.

Q: ulation of earnings available for common stockholders divided by common stock equity?

A: Shareholder Equity is the sum of Share capital and Shareholder funds ( Reserves and Surplus) . So it...

Q: Liquidity ratio Josh Smith has compiled some of his personal financial data in order to determine hi...

A: The correct answer for the above question is given in the following steps for your reference.

Q: SIGE NA Company has the following book balances at Dec.31,2020 Bonds Payable Discount on Bonds Payab...

A: Loss on redemption on bonds = Unamortized Discount on bonds + Unamortized bond issue costs + Premium...

Q: Uf changes in equity for the year ended 3 Question: För the December 2017, Daffodil Limited (DL) has...

A: Workings: 1) Right shares issued on May 1, 2016;  No. of right shares = (160 shares in millions * 25...

Q: On May 1, 2021, Company A shipped merchandise costing $16,000 to Company B on consignment. Company A...

A:   Solution Goods sold on consignment Under goods sold on consignment the consignor sends the goods t...

Q: The Atlantic Medical Clinic can purchase a new computer system that will save $6,000 annually in bil...

A: In order to compute the maximum amount that Atlantic Medical Clinic should pay, the annual savings a...

Q: One of examples of contingent liability is an: * a. Obligations related to product warranties b. Po...

A: As per IFRS 37 provisions, contingent liabilities and Contingent assets. A provision is an present o...

Q: Question: The statements of financial position of Grand Company at the beginning and end of 2017 inc...

A: Cash paid for acquisition of property, plant and equipment = Ending balance of property, plant and e...

Q: Journal Journalize the two entries required to close the accounts. Refer to the chart of accounts fo...

A: Closing entries are those entry of a company that are recorded at the end of each accounting period ...

Q: Directions: Complete the table below. The first item has been uoe Increased by Decreased by List of ...

A: The balance sheet represents the financial position of the business with assets and liabilities on t...

Q: n a period of rising prices, which method would yield the lowest ending inventory, highest net incom...

A: Inventory valuation refers to the methods used by the company to determine the value of its inventor...

Q: Syracuse Metal Works produces two types of metal lampa. Syracuse manulactures 26.000 basic lamps and...

A: Indirect cost allocation:     Basic lamps Designer lamps a Direct manufacturing labor per lamp ...

Q: Required: Based on the information contained in the extracts of Bowdry Ltd's latest financial statem...

A: Here Student asked for multi sub part question we will solve first three sub parts.  If the student ...

Q: 2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not r...

A: First we calculate, predetermined overhead rate Predetermined overhead rate = Estimated total overhe...

Q: On July 1. 2022, Damlen Jurado Company pays $12.000 to its insurance company for a 2-year insurance ...

A: Lets understand the basics. When payment for expense is made for more than one period then prepaid e...

Q: ess Inventory 18,000 5,000 23,000 23.000 23,000 18,000 еcation 5,000 23,000 18,000 reciation 5,000

A: Just in time costing system is where goods are ordered only when they are required . This reduces th...

Q: 1. A business is generating $100,000 per year for the next ten years except year 5 (used for overhau...

A: Solution Formula used Equal annual revenue    =present value of revenue / present value of annuity f...

Q: axed at 25%. Amount Pre-tax Cost Bonds P 3,000,000 1,000,000 4,000,000 8% Preferred Shares 10% Drdin...

A: Weighted average cost of capital is cost of capital considering the weights of different sources of ...

Q: Micro Tek Inc. is considering an investment in new equipment that will be used to manufacture a smar...

A: Average rate of return = Average annual income / Average investment Where  Average investment = (cos...

Q: Mickley Company's plantwide predetermined overhead rate is $22.00 per direct labor-hour and Its dire...

A: Predetermined overhead rates are set in advance and are applied on activities in the manufacturing p...

Q: accounting purposes, but uses sum-of-the-years' digit method Daniel Company purchased an equipment c...

A:

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.