Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 10, Problem 1P
To determine
Record the correcting entries to reclassify the preceding items.
Expert Solution & Answer
Trending nowThis is a popular solution!
Chapter 10 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 10 - Prob. 1GICh. 10 - Prob. 2GICh. 10 - What is the relationship between the book value...Ch. 10 - Prob. 4GICh. 10 - Prob. 5GICh. 10 - Prob. 6GICh. 10 - What are asset retirement obligations? How should...Ch. 10 - Prob. 8GICh. 10 - Prob. 9GICh. 10 - Prob. 10GI
Ch. 10 - At what amount does a company record the cost of a...Ch. 10 - Prob. 12GICh. 10 - Prob. 13GICh. 10 - Prob. 14GICh. 10 - Prob. 15GICh. 10 - Prob. 16GICh. 10 - Prob. 17GICh. 10 - What is the distinction between a capital and an...Ch. 10 - Distinguish between additions and...Ch. 10 - Distinguish between ordinary repairs and...Ch. 10 - Prob. 21GICh. 10 - Hickory Company made a lump-sum purchase of three...Ch. 10 - Prob. 2MCCh. 10 - Electro Corporation bought a new machine and...Ch. 10 - Prob. 4MCCh. 10 - Lyle Inc. purchased certain plant assets under a...Ch. 10 - Ashton Company exchanged a nonmonetary asset with...Ch. 10 - Prob. 7MCCh. 10 - Prob. 8MCCh. 10 - Prob. 9MCCh. 10 - Prob. 10MCCh. 10 - On January 1, Duane Company purchases land at a...Ch. 10 - Prob. 2RECh. 10 - Utica Corporation paid 360,000 to purchase land...Ch. 10 - Prob. 4RECh. 10 - Prob. 5RECh. 10 - Prob. 6RECh. 10 - Nabokov Company exchanges assets with Faulkner...Ch. 10 - Prob. 8RECh. 10 - Dexter Construction Corporation is building a...Ch. 10 - Prob. 10RECh. 10 - Prob. 11RECh. 10 - Ricks Towing Company owns three tow trucks. During...Ch. 10 - Inclusion in Property, Plant, and Equipment...Ch. 10 - Prob. 2ECh. 10 - Acquisition Costs Voiture Company manufactures...Ch. 10 - Determination of Acquisition Cost In January 2019,...Ch. 10 - Asset Retirement Obligation Big Cat Exploration...Ch. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Exchange of Assets Two independent companies,...Ch. 10 - Exchange of Assets Use the same information as in...Ch. 10 - Prob. 11ECh. 10 - Exchange of Assets Goodman Company acquired a...Ch. 10 - Exchange of Assets Use the same information as in...Ch. 10 - Prob. 14ECh. 10 - Self-Construction Harshman Company constructed a...Ch. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Expenditures after Acquisition McClain Company...Ch. 10 - Prob. 21ECh. 10 - Prob. 1PCh. 10 - Classification of Costs Associated with Assets The...Ch. 10 - Prob. 3PCh. 10 - Comprehensive At December 31, 2018, certain...Ch. 10 - Assets Acquired by Exchange Bremer Company made...Ch. 10 - Assets Acquired by Exchange Bussell Company...Ch. 10 - Self-Construction Olson Machine Company...Ch. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Events Subsequent to Acquisition The following...Ch. 10 - Prob. 11PCh. 10 - Prob. 1CCh. 10 - Prob. 2CCh. 10 - Cost Issues Deskin Company purchased a new machine...Ch. 10 - Prob. 4CCh. 10 - Prob. 5CCh. 10 - Prob. 6CCh. 10 - Prob. 7CCh. 10 - Prob. 9CCh. 10 - Prob. 10CCh. 10 - Prob. 11C
Knowledge Booster
Similar questions
- Expenditures after Acquisition McClain Company incurred the following expenditures during 2019: Required: 1. Prepare journal entries to record McClains expenditures for 2019. 2. Next Level What is the effect on the financial statements if management had improperly accounted for the: a. addition of the new wing to the manufacturing facility b. annual maintenance expendituresarrow_forwardOn December 31, 2019, Vail Company owned the following assets: Vail computes depreciation and amortization expense to the nearest whole year. During 2020, Vail engaged in the following transactions: Required: 1. Check the accuracy of the accumulated depreciation balances at December 31, 2019. Round to the nearest whole dollar in all requirements. 2. Prepare journal entries to record the preceding events in 2020, as well as the year-end recording of depreciation expense. 3. Prepare an Accumulated Depreciation account for each category of assets, enter the beginning balance, post the journal entries from Requirement 2, and compute the ending balance.arrow_forwardBalance Sheet and Notes Listed here in random order are Wicks Construction Limiteds balance sheet accounts and related ending balances as of December 31, 2019: Additional information: 1. The company reports on the balance sheet the total amount for inventories and the net book value of property, plant, and equipment, with the related details for each account disclosed in notes. 2. The straight line method is used to depreciate buildings, machinery, and equipment, based upon their cost and estimated residual values and lives. A breakdown of property, plant, and equipment shows the following: land at a cost of 32,000, buildings at a cost of 182,400 and a net book value of 120,200, machinery at a cost of 63,900, and related accumulated depreciation of 18,600, and equipment (40% depreciated) at a cost of 53,000. 3. Patents are amortized on a straight line basis directly to the Patent account. 4. Inventories are listed at the lower of cost or market value using an average cost. The inventories include raw-materials, 22,200; work in process, 34,700; and finished goods, 41,600. 5. Common stock has a 10 par value per share, 12,000 shares are authorized, and 6,280 shares have been issued. 6. Preferred stock has a 100 par value per share, 1,000 shares are authorized, and 400 shares have been issued. 7. The investment in bonds is carried at the original cost, which is the face value, and is being held to maturity. 8. Short-term investments in marketable securities were purchased at year-end. 9. The bonds payable mature on December 31, 2024. 10. The company attaches a 1-year warranty on all the products it sells. Required: 1. Prepare Wicks Constructions December 31, 2019, balance sheet (including appropriate parenthetical notations). 2. Prepare notes to accompany the balance sheet that itemize company accounting policies; inventories; and property, plant, and equipment. 3. Next Level Compute the current ratio and the quick ratio. How do these two ratios provide different information about the companys liquidity? Why are these ratios useful?arrow_forward
- Determination of Acquisition Cost In January 2019, Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of 215,000, was paid for as follows: Required: 1. Determine the cost of the machine. What principle guides the determination of the cost of the machine? 2. Prepare the journal entry to record the acquisition of the machine. 3. Next Level How would your answer change, if at all, if the 215,000 cash price were not available?arrow_forwardDisposal of Fixed Asset Pacifica Manufacturing retired a computerized metal stamping machine on December 31, 2019. Pacifica sold the machine to another company and did not replace it. The following data are available for the machine: The machine was sold for $225,000 cash. Pacifica uses the straight-line method of depreciation. Required: 1. Prepare the journal entry to record depreciation expense for 2019. 2. Compute accumulated depreciation at December 31, 2019. 3. Prepare the journal entry to record the sale of the machine. 4. CONCEPTUAL CONNECTION Explain how the disposal of the fixed asset would affect the 2019 financial statements. Ignore income taxes.arrow_forwardCost of Asset and Depreciation Method Heist Company purchased a machine on January 2, 2019, and uses the 150%-declining-balance depreciation method. The machine has an expected life of 10 years and an expected residual value of 5,000. The following costs relate to the acquisition and use of the machine during the first year of its operations: Required: 1. Compute the depreciation expense for 2019 and 2020. 2. Next Level What is the effect on the financial statements if the company used the straight-line method instead of the 150%-declining-balance method?arrow_forward
- 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?arrow_forwardInvesting Activities and Depreciable Assets Verlando Company had the following account balances and information available for 2019: During 2019, Verlando recorded the following transactions affecting these accounts: a. Land with a carrying value of 35,000 was sold at a loss of 6,000. b. Land and equipment were purchased with cash during the period. c. Equipment with an original cost of 20,000 that had a book value of 4,000 was written off as obsolete. d. A building with an original cost of 60,000 and accumulated depreciation of 25,000 was sold at a 23,000 gain. e. Depreciation expense and amortization expense were recorded. f. Net income for the year was 60,000. g. A patent was acquired during the year in exchange for 1,200 shares of common stock with a par value of 1 per share and a market value of 26 per share. h. Additional marketable securities wefe purchased during the year. i. Verlando Company has no notes payable in the liabilities section of its balance sheet. Required: 1. Next Level Assuming that Verlando uses the indirect method to determine operating cash flows, what is the amount of depreciation expense and amortization expense that would be added back to net income: 2. Prepare the investing activities section of the statement of cash flows for the year ended December 31, 2019. 3. Prepare the disclosure for significant noncash transactions for the statement of cash flows for the year ended December 31, 2019.arrow_forwardComprehensive: Balance Sheet, Schedules, and Notes The following is an alphabetical listing of Stone Boat Companys balances sheet accounts and account balances on December 31, 2019: Additional information: 1. The company reports on the balance sheet the net book value of property and equipment and long-term liabilities (known as control accounts). The related details are disclosed in the notes. 2. The straight-line method is used to depreciate property and equipment based upon cost, estimated residual value, and estimated life. The costs of the assets in this account are: land, 29,500; buildings, 164,600; store fixtures, 72,600; and office equipment, 30,000. 3. The accumulated depreciation breakdown is as follows: buildings, 54,600; store fixtures, 37,400; and office equipment, 17,300. 4. The long term debt includes 12%, 36,000 face value bonds that mature on December 31, 2024, and have an unamortized bond discount of 1,000; 11%, 48,000 face value bonds that mature on December 31, 2025, have a premium on bonds payable of 1,800, and whose retirement is being funded by a bond sinking fund; and a 13% note payable that has a face value of 6,200 and matures on January 1, 2022. 5. The non-interest-bearing note receivable matures on June 1, 2023. 6. Inventory is listed at lower of cost or market; cost is determined on the basis of average cost. 7. The investment in affiliate is carried at cost. The company has guaranteed the interest on 12%, 50,000, 15-year bonds issued by this affiliate, Jay Company. 8. Common stock has a 10 par value per share, 10,000 shares are authorized, and 1,000 shares were issued during 2019 at a price of 13 per share, resulting in 8,000 shares issued at year-end. 9. Preferred stock has a 50 par value per share, 2,000 shares are authorized, and 140 shares were issued during 2019 at a price of 55 per share, resulting in 640 shares issued at year-end. 10. On January 15, 2020, before the December 31, 2019, balance sheet was issued, a building with a cost of 20,000 and a book value of 7,000 was totally destroyed. Insurance proceeds will amount to only 5,000. 11. Net income and dividends declared and paid during the year were 50,500 and 21,000, respectively. Required: 1. Prepare Stone Boats December 31, 2019, balance sheet (including appropriate parenthetical notations). 2. Prepare a statement of shareholders equity for 2019. (Hint: Work back from the ending account balances.) 3. Prepare notes that itemize the balance sheet control accounts and those necessary to disclose any company accounting policies, contingent liabilities, and subsequent events. 4. Next Level Compute the debt-to-assets ratio at the cud of 2019. What is your evaluation of this ratio if it was 39% at the end of 2018? Use the following information for P415 and P416: McCormick Company, Inc. is one of the worlds leading producers of spices, herbs, seasonings, condiments, and other flavorings for foods. Its products are sold to consumers, with sonic of the leading brands of spices and seasonings, as well as to industrial producers of foods. McCormicks consolidated balance sheets for 20X2 and 20X3 follow.arrow_forward
- Depreciation Methods On January 1, 2019, Loeffler Company acquired a machine at a cost of $200,000. Loeffler estimates that it will use the machine for 4 years or 8,000 machine hours. It estimates that after 4 years the machine can be sold for $20,000. Loeffler uses the machine for 2,100 and 1,800 machine hours in 2019 and 2020, respectively. Required: Compute depreciation expense for 2019 and 2020 using the (1) straight-line, (2) double-declining-balance, and (3) units-of-production methods of depreciation.arrow_forwardDepreciation Methods Nickle Company purchased three identical assets for 17,000 on January 2, 2019. Each asset has an expected residual value of 1,000. The depreciation expense for 2019 and 2020 is shown below for three assets: Required: 1. Next Level Which depreciation method is the company using for each asset? 2. Compute the depreciation expense for 2021 and 2022 for each asset.arrow_forwardStraight-Line Depreciation Refer to the information for Irons Delivery Inc. above. Irons uses the straight-line method of depreciation. Required: Prepare the journal entry to record depreciation expense for 2019 and 2020.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning