Current Attempt in Progress Blossom Department Store determines it will cost $107,000 to restore the area (considered a land improvement) surrounding one of Its store parking lots, when the store is closed in 2 years. Blossom estimates the fair value of the obligation at December 31, 2025, is $93,000. Prepare the journal entry to record the asset retirement obligation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry) Account Titles and Explanation Debit Credit

Current Attempt in Progress Blossom Department Store determines it will cost $107,000 to restore the area (considered a land improvement) surrounding one of Its store parking lots, when the store is closed in 2 years. Blossom estimates the fair value of the obligation at December 31, 2025, is $93,000. Prepare the journal entry to record the asset retirement obligation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry) Account Titles and Explanation Debit Credit

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

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 9P: During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the...

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On December 31, 2020, Martinez Company acquired a computer from Plato Corporation by issuing a $564,000 zero-interest-bearing note, payable in full on December 31, 2024. Martinez Company's credit rating permits it to borrow funds from its several lines of credit at 12%. The computer is expected to have a 5-year life and a $73,000 salvage value. (a) Your answer is correct. Prepare the journal entry for the purchase on December 31, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date December 31, 2020 Account Titles and Explanation Equipment Discount on Notes Payable Notes Payable Debit 358422 205578 Credit 564000
On December 31, 2020, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2024. Faital Company's credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a $70,000 salvage value. Instructions (Round answers to the nearest cent.) a. Prepare the journal entry for the purchase on December 31, 2020. b. Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2021. c. Prepare any necessary adjusting entries relative to depreciation and amortization on December 31, 2022.
On August 1, 2021, FAITH Inc purchased a new machine on a deferred payment basis. A down payment of P200,000 was made and 4 annual instalments of P300,000 each are to be made beginning on August 1, 2022. An interest rate of 6% reflects the time value of money for this type of loan agreement. Due to an employee strike, the company could not install the machine immediately, and thus incurred P30,000 of storage costs. Costs of installation (excluding the storage costs) amounted to P80,000. What is the capitalized cost of the machine? Round-off your final answer to the nearest peso.
On January 1, 2021, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a noninterestbearing note requiring $25,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. Required:1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar.2. How much interest expense will the company include in its 2021 and 2022 income statements for this note?3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note?
You have been asked to review the December 31, 2021, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior: An investment of $44,000 is included in current assets. Management has indicated that it has no intention of liquidating the investment in 2022. A $240,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10, equal annual installments with the first installment due on March 31, 2022. Deferred revenue of $102,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2022, and the other one-third in 2023. Determine the appropriate classification of each of these items. (If no entry is required for classification, choose "No entry".)
Taylor Swift Corporation purchases a patent from Salmon Company on January 1, 2025, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Taylor Swift's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Patents cash (To record purchase of patents) Amortization Expense Patents (To record amortization of patents) Debit 24,000 8400 Credit 24,000 24,000
On October 1, 2019, Alharam sold and delivered 3 doors to a builder for $40,000. The builder plans to install it in one of its “Parade of Homes” houses. Alharam accepted a 5-year, zerointerest bearing note with face amount of $53,240. The doors have cost of $25,500. An interest rate of 10% is an appropriate market rate of interest for this customer. What's the entries of this transactionand i wana explain of the entries
Using the information below for Baxter Corporation, prepare all necessary journal entries ONLY on December 31, 2021, 2022, and 2023. If no entry is needed, write “No entry.” (Dates are all correct!!) Show all computations below. • Baxter Corporation purchases a copyright in January 2020 for $500,000, incurring legal costs of $50,000. The copyright has a legal life of 25 years and an estimated useful life of 10 years. • In January 2022, Baxter successfully defended its copyright, incurring $75,000 in legal fees. The estimated useful life remains the same. • During 2023, based on new marketing research, Baxter determines that the fair value of the copyright is $400,000. Estimated total future cash flows from the copyright are $425,000. Record any impairment loss and adjusting entry on December 31, 2023. No change in estimated useful life.
Sandhill Corp. sells idle machinery to Hollis Company on July 1, 2020, for $33,000. Sandhill agrees to repurchase this equipment from Hollis on June 30, 2021, for a price of $34,320 (an imputed interest rate of 4%). Prepare any other necessary journal entries for Sandhill in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Interest Expense enter a debit amount enter a credit amount Liability to Hollis Company enter a debit amount enter a credit amount
During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.
You have been asked to review the December 31, 2024, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior: An investment of $30,000 is included in current assets. Management has indicated it has no intention of liquidating the investment in 2025. A $100,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10 equal annual installments with the first installment due on March 31, 2025. Deferred revenue of $60,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2025, and the other one-third in 2026.
On January 1, 2024, Byner Company purchased a used tractor. Byner paid $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare the journal entry to record the acquisition of the tractor. How much interest expense will the company include in its 2024 and 2025 income statements for this note? What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?