Your company has acquired several pieces of equipment. Prepare the journal entry for the following transactions. You bought NEW equipment (equipment A) which had a market value of $32,000 and exchanged OLD equipment (equipment B) which cost $50,000, had a book value of $30,000, and a market value of $28,000 plus you paid $3,000 in cash. This transaction А. LACKS commercial substance. You bought NEW equipment (equipment C) which had a market value of $11,000 and oxohoncod OL D oguinmont (oouinmont D) which gost c20. 000 hod o book vo1ue of B.
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- A 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 principleJohnson, Incorporated had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Purchased a copyright for $5,000 cash Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for major repairs If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?Bramble Manufacturing has old equipment that cost $56,000. The equipment has accumulated depreciation of $27,600. Bramble has decided to sell the equipment. (a)What entry would Bramble make to record the sale of the equipment for $30,000 cash? (b)What entry would Bramble make to record the sale of the equipment for $15,000 cash?
- The text states, "Overly sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners". Demonstrate the accuracy of this statement in the following scenario: Two friends contributed 50,000 each to form a new business. The owners used the amounts contributed to purchase a machine for 100,000 cash. They estimated that the useful life of the machine was five years and the salvage value was 20,000. They rented out the machine to a customer for an annual rental of 25,000 a year for five years. Annual cash operating costs for insurance, taxes, and other items totaled 6,000 annually. At the end of the fifth year, the owners sold equipment for 22,000, instead of the 20,000 salvage value initially estimated. (Hint: Compute the total net income and the total cash flows other than cash flows with owners for the five-year period as a whole.) You may want to present a table to support your conclusion. If so, please create the table in Excel…The “Big-Deal” Company has purchased new furniture for their offices at a retail price of $125,000. An additional $20,000 has been charged for insurance, shipping, and handling. The company expects to use the furniture for 10 years (useful life = 10 years) and then sell it at a salvage (market) value of $15,000. Use the SL method of depreciation to answer these questions. Solve, a. What is the depreciation during the second year? b. What is the BV of the asset at the end of the first year? c. What is the BV of the asset after 10 years?Write a report to management by carefully analyzing the following comments made by the Finance Manager of Combo Company Limited, a listed company with a total net worth of GH¢ 25,000,000.00. Your position should be supported by the relevant accounting standard, convention, and concept.i. “The depreciation of a motor vehicle is charged on a straight-line basis but after some years of the asset usage, I notice that the efficiency of the asset has reduced, but the same amount of depreciation amount is charged and that reduces profit level. So, let us change from straight line to reducing balance method which to him is fair”ii. The company bought two needles at the cost of GH¢1.00 each. The Finance Manager said “this is an acquisition of non-current asset (equipment) which should be recorded in the asset register and depreciated in line with equipment depreciation policy”iii. “Our customers have proved to be trustworthy for the years the company has dealt with them, so to me, making…
- Can I please get help with this practice question? Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required Determine the total product cost and the average…Innovative Inc. has a piece of equipment with a carrying amount of $187,000. Technology has changed, indicating that the machine may be impaired. A new machine with updated technology could be purchased for $358,000. A used machine of similar vintage is listed on-line for $168,000. The estimated discounted cash flows from continuing to use the asset are $156,000. The undiscounted cash flows from the use of the asset are $188,000. The estimated value if the company sold the asset less commission costs is $163,000. Required:1. What is the recoverable amount? The recoverable amount is the of fair value costs of disposal and value in use . The recoverable amount is then compared to the carrying amount of the asset 2. What is the amount of impairment?Webster & Moore paid $148,000, in cash, for equipment three years ago. At the beginning of last year, the company spent $21,000 to update the equipment with the latest technology. The company no longer uses this equipment in its current operations and has received an offer of $96,000 from a firm that would like to purchase it. The firm is debating whether to sell the equipment or to expand its operations so that the equipment can be used. The equipment, including the updates, has a book value of $44,500. When evaluating the expansion option, what value, if any, should the firm assign to this equipment as an initial cost of the project? a) $0 b) $44,500 c) $96,000 d) $124,500 e) $160,000
- a) Darling Paper Container, Inc. purchased several machines at a total cost of $300,000. The installation cost for this equipment was $25,000. The firm plans to depreciate the equipment using the MACRS 5-year normal recovery period. Prepare a depreciation schedule showing the depreciation expense for each year. b) Identify each expense or revenue as a cash flow from operating activities (O), a cash flow from investment activities (I), or a cash flow from financing activities (F).a. Administrative expensesb. Rent paymentc. Interest on a note payabled. Interest on a note receivablee. Sale of equipmentf. Dividend paymentg. Stock repurchaseh. Sale of finished goodsi. Labor expensej. Sale of a bond issuek. Repayment of a long-term debtl. Selling expensesm. Depreciation expensen. Sale of common stocko. Purchase of fixed assetsCan I please get help with this practice question? for parts d e f Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required Determine the total product cost…Jada Company had the following transactions during the year:• Purchased a machine for $500,000 using a long-term note to finance it• Paid $500 for ordinary repair• Purchased a patent for $45,000 cash• Paid $200,000 cash for addition to an existing building• Paid $60,000 for monthly salaries• Paid $250 for routine maintenance on equipment• Paid $10,000 for major repairs• Depreciation expense recorded for the year is $25,000If all transactions were recorded properly, what is the amount of increase to the Property, Plant, andEquipment section of Jada’s balance sheet resulting from this year’s transactions? What amount did Jadareport on the income statement for expenses for the year?