Crowe Company purchased a heavy-duty truck on July 1, 2017, for $30,000. It was estimated that it would have a useful life of 10 years and then would have a trade-in value of $6,000. The company uses the straight-line method. It was traded on August 1, 2021, for a similar truck costing $42,000; $16,000 was allowed as trade-in value (also fair value) on the old truck and $26,000 was paid in cash. A comparison of expected cash flows for the trucks indicates the exchange lacks commercial substance. What is the entry to record the trade-in?

XYZ Company, a calendar year business, purchased machinery on February 2, 2016. The purchase price of the machinery was $90,000 and the machinery was subject to a 7% sales tax on the purchase price. The company paid $1,500 to have the machinery delivered and set up at its factory. What is the initial basis of the asset?

In 2022, Leo construction traded in a light duty pickup truck that had a book value of $18,000. A new pickup truck having a fair market value of $55,236 was acquired. Because the vendor accepted the old truck as a trade-in, a deal was agreed, and Leo construction would only pay $32,405 for the new truck.   Compute the third year depreciation (d3) for the new truck using the general depreciation system method.

Cyberdyne Systems sold a piece of equipment August 1, 2020 for $22,000. The original cost of the equipment was $60,000 and it was purchased on January 1, 2017. The residual value was estimated to be $3,000 and it had a 5 year useful life. Cyberdyne uses the straight-line method. Cyberdyne has a December 31 year end. Instructions Record the sale of the asset in 2020. Note: You do not need to make the journal entries for depreciation expense for 2017, 2018, 2019 and 2020. Assume that these journal entries were already made correctly.

On 1 July 2017, Entity A purchased a chemical machine from Entity B on credit.  The purchase price was $4,560,000 and it will be fully settled on 1 August 2017.  A legal and professional fee of $35,500 was paid by a cheque to Entity C in order to ensure the machine can be ready for use on 1 July 2017.  The economic life of the machine is 5 years without any residual value. According to the purchase contract, Entity A is required to remove the plant on 30 June 2022 and Entity A estimated the dismantling costs of the plant will be $55,123 on that day.  Entity A considered that a discount rate of 10.50% is appropriate for the calculation of present value. On 30 June 2022, the actual dismantling costs were only $45,600 and they were paid by a direct bank transfer to Entity D. On 1 July 2022, a recycling company, Entity E, purchased all the machine scraps for $32,500 on credit and agreed to pay in full on 16 July 2022. REQUIRED: According to relevant accounting standards, prepare journal…

Equipment was purchased for $83700 on January 1, 2021. Freight charges amounted to $4000 and there was a cost of $12000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $16000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2022 if the straight-line method of depreciation is used? O $16740. $13540. $28140. $33480.

On July 15, 2018, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for $750,000and $325,000, respectively. The book value of the patent and equipment on the date of sale were $120,000 and$400,000 (cost of $550,000 less accumulated depreciation of $150,000), respectively. Prepare the journal entriesto record the sales of the patent and equipment.

The Kaltec Construction Company purchased a piece of machinery on June 29, 2013 for $53 000. Freight costs came to $800. It cost $1 700 to install and test the machinery. At this time it was estimated that the machine would be used for six years and would have a residual value of $8 000 at that time. Before recording the 2016 amortization expense, the owners realized that this machinery would last only five years, and therefore revised the amortization expense calculation. On July 2, 2017, the machine broke down and rather than repair it, the company decided to sell it for $12 000. a) Prepare the journal entry to record the purchase of the machine on June 29, 2013. b) Calculate the amortization charges that would appear on the December 2013, 2014 and 2015 income statements, using the straight line method of amortization. c) Show the journal entry for the 2013 amortization. d) Show how the machine would appear in the Kaltec Construction Company Balance Sheet on December 31, 2015,…

Luna Springs Inc. exchanged an old vehicle for a new vehicle on August 31, 2014. The original cost of Luna Springs Inc.'s old vehicle was $45,000 on January 1, 2010. Depreciation was calculated using the straight line method over a ten-year useful life, with an estimated residual value of $3,000. The fair value of the old vehicle on August 31, 2014 was $21,500. The list price of the new vehicle was $30,000. Luna Springs Inc. paid $2,000 in cash as part of the exchange. The new vehicle should be recorded on Luna Springs Inc.'s books at: $25400, $23500, $30000, or none of the above

Susan Co. has a machine that cost $810,000 on March 20, 2017. This old machine had an estimated life of ten years and a salvage value of $30,000. On December 23, 2021, the old machine is exchanged for a new machine with a fair value of $522,000. The exchange lacked commercial substance. Susan also received $58,000 cash. Assume that the last fiscal period ended on December 31, 2020, and that straight-line depreciation is used. Show the calculation of the amount of gain or loss to be recognized by Susan Co. from the exchange.