Prepare the journal entry to record the sale of the building on Windsor's books, assuming 6 years of depreciation has alreadybeen recorded in the accounts to the date of disposal. The building was sold for $3,598,000 cash. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter O for the amounts. List all debit entries before credit entries.)DateAccount Titles and ExplanationDebitCredit urrent Attempt in ProgressWindsor Ltd. owned several manufacturing facilities. On September 15 of the current year, Windsor decided to sell one of itsmanufacturing buildings. The building had cost $5,140,000 when originally purchased 6 years ago and had been depreciated using thestraight-line method with no residual value. Windsor estimated that the building had a 20-year life when purchased.(a)

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Description: Prepare the journal entry to record the sale of the building on Windsor's books, assuming 6 years of depreciation has alreadybeen recorded in the accounts to the date of disposal. The building was sold for $3,598,000 cash. (Credit account titles are

Formula of annual depreciation under SLM.Annual Depreciation (straight line method) = (Cost of the…

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Windsor Ltd. owned several manufacturing facilities. On September 15 of the current year, Windsor decided to sell one of its manufacturing buildings. The building had cost $5,140,000 when originally purchased 6 years ago and had been depreciated using the straight-line method with no residual value. Windsor estimated that the building had a 20-year life when purchased.

Windsor Ltd. owned several manufacturing facilities. On September 15 of the current year, Windsor decided to sell one of its manufacturing buildings. The building had cost $5,140,000 when originally purchased 6 years ago and had been depreciated using the straight-line method with no residual value. Windsor estimated that the building had a 20-year life when purchased.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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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.
Tree Lovers Inc. purchased 100 acres of woodland in which the company intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $2,100,000 for the land. Tree Lovers will sell the lumber as it is harvested and expects to deplete it over five years (twenty acres in year one, thirty acres in year two, twenty-five acres in year three, fifteen acres in year four, and ten acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
Tuttle Construction Co. specializes in building replicas of historic houses. Tim Newman, president of Tuttle Construction, is considering the purchase of various items of equipment on July 1, 2014, for 400,000. The equipment would have a useful life of five years and no residual value. In the past, all equipment has been leased. For tax purposes, Tim is considering depreciating the equipment by the straight-line method. He discussed the matter with his CPA and learned that, although the straight-line method could be elected, it was to his advantage to use the Modified Accelerated Cost Recovery System (MACRS) for tax purposes. He asked for your advice as to which method to use for tax purposes. 1. Compute depreciation for each of the years (2014, 2015, 2016, 2017, 2018, and 2019) of useful life by (a) the straight-line method and (b) MACRS. In using the straight-line method, one-half years depreciation should be computed for 2014 and 2019. Use the MACRS rates presented in Exhibit 9. 2. Assuming that income before depreciation and income tax is estimated to be 750,000 uniformly per year and that the income tax rate is 40%, compute the net income for each of the years 2014, 2015, 2016, 2017, 2018, and 2019 if (a) the straight-line method is used and (b) MACRS is used. 3. What factors would you present for Tims consideration in the selection of a depreciation method?
Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $5,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and it expects to deplete it over ten years (150 acres in year one, 300 acres in year two, 250 acres in year three, 150 acres in year four, and 100 acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
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New Morning Bakery is in the process of closing its operations. It sold its two-year- old bakery ovens to Great Harvest Bakery for $610,000. The ovens originally cost $ 811,000, had an estimated service life of 10 years, had an estimated residual value of $51,000, and were depreciated using straight-line depreciation. Complete the requirements below for New Morning Bakery. 4. Determine the financial statement effects of the sale of the ovens at the end of the second year.
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