FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Information related to plant assets, natural resources, and intangibles at the end of 2020 for Metlock, Inc. is as follows: buildings $1,190,000,
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- At December 31, 2019, certain accounts included in the property, plant, and equipment section of Oriole Company’s balance sheet had the following balances. Land $236,300 Buildings 895,000 Leasehold improvements 666,400 Equipment 882,500 During 2020, the following transactions occurred. 1. Land site number 621 was acquired for $859,000. In addition, to acquire the land Oriole paid a $60,700 commission to a real estate agent. Costs of $40,700 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $20,500. 2. A second tract of land (site number 622) with a building was acquired for $420,400. The closing statement indicated that the land value was $301,400 and the building value was $119,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $331,100 plus the following costs. Excavation fees $38,300 Architectural design…arrow_forwardThe plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2023: Plant Asset Accumulated Depreciation $ 335,000 175,500 1,470,000 1,128,000 147,000 Land Land improvements Building Equipment Automobiles Transactions during 2024 were as follows: a. On January 2, 2024, equipment were purchased at a total invoice cost of $245,000, which included a $5,200 charge for freight. Installation costs of $24,000 were incurred in addition to the invoice cost. b. On March 31, 2024, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $22,000. The fair value of the building on the day of the donation was $15,400. c. On May 1, 2024, expenditures of $47,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn't provide future benefits beyond those originally anticipated. d. On…arrow_forwardABC Ltd has the following land and buildings in its financial statements as of 30 June 2022: Residential land, at cost 2,553,800 Factory land, at valuation 2020 2,298,420 Buildings, at valuation 2020 2,043,040 Accumulated depreciation -255,380 At 30 June 2022, the balance of the revaluation surplus is $1,021,520, of which $766,140 relates to the factory land and $255,380 to the buildings. On this same date, independent valuations of the land and buildings are obtained. In relation to the above assets, the assessed fair values at 30 June 2022 are: Residential land, previously recorded at cost 2,809,180 Factory land, previously revalued in 2020 1,787,660 Buildings, previously revalued in 2020 2,298,420 Required: Provide the journal entries to account for the revaluation on 30 June 2022. ABC Ltd classifies the residential land and the factory land as different classes of assets.arrow_forward
- Classification of Costs Associated with Assets the following account balances were included in Bromley Company's balance sheet on December 31,2018: During 2019, the following transactions occurred: 1.Land was acquired for $70,000 for a future building site. Commissions of $4,000 were paid to real estate agent. 2. A factory and land were acquired from Kent development company by issuing 20,000 shares of $3 par common stock. At that time, the stock. At that time, the stocl was selling for $10 per share on the New york stock exchange. The independently appraised values of the land and the factory were $60,000 and $180,000 respectively. 3.Equipment was acquired at a cost of $120,000. In addition, sales tax, freight costs, and installation costs were $7,000, $10,000 and $16,000, respectively. During installation, the equipment was damaged, and $2000 was spent for repairs. 4.A new parking lot was installed at a cost of $30,000. 5.Half the land purchased in Item 1 was prepared as a building…arrow_forwardThe plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2023: Plant Asset Accumulated Depreciation $ 340,000 177,000 1,480,000 1,138,000 148,000 Land Land improvements Building Equipment Automobiles Transactions during 2024 were as follows: a. On January 2, 2024, equipment were purchased at a total invoice cost of $250,000, which included a $5,300 charge for freight. Installation costs of $25,000 were incurred in addition to the invoice cost. b. On March 31, 2024, a small storage building was donated to the company. The person donating the building originally purchased It three years ago for $23,000. The fair value of the building on the day of the donation was $16,000. c. On May 1, 2024, expenditures of $48,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn't provide future benefits beyond those originally anticipated. d. On…arrow_forwardDogarrow_forward
- Suppose during 2022 that Federal Express reported the following information (in millions): net sales of $34,400 and net income of $88. Its balance sheet also showed total assets at the beginning of the year of $24,580 and total assets at the end of the year of $23,300. Calculate the asset turnover and return on assets. (Round asset turnover to 2 decimal places, e.g. 6.25 and return on assets to 1 decimal place, e.g. 17.5%.) Asset turnover Return on assets times %arrow_forwardThe T-accounts for Equipment and the related Accumulated Depreciation—Equipment for Luo Company at the end of 2020 are shown here. Equipment Beg. bal. 80,600 Disposals 23,800 Acquisitions 40,000 End. bal. 96,800 Accumulated Depreciation—Equipment Disposals 8,700 Beg. bal. 47,800 Depr. exp. 13,300 End. bal. 52,400 In addition, Luo’s income statement reported a loss on the disposal of plant assets of $6,100. What amount was reported on the statement of cash flows as “cash flow from sale of equipment”? (Show amount that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Cash flow from sale of equipment $arrow_forwardPresented below is information related to equipment owned by Novak Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value $11,250,000 1,250,000 8,750,000 Dec. 31 6,000,000 Novak intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $25,000. As of December 31, 2025, the equipment has a remaining useful life of 4 years. The asset was not sold by December 31, 2026. The fair value of the equipment on that date is $6,625,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $25,000. (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. List debit entry before credit entry.) Date Account Titles and Explanation Debit Creditarrow_forward
- Required information (The following information applies to the questions displayed below.) The plant assets section of the comparative balance sheets of Anders Company is reported below. ANDERS COMPANY Comparative Year-End Balance Sheets 2021 2020 Plant assets Equipment Accumulated depreciation-Equipment Equipment, net Buildings Accumulated depreciation-Buildings $ 180,000 (100,000) $ 80,000 $ 380, 000 (100,000) $ 280,000 $ 270,000 (210,000) $ 60, 000 $ 400,000 (285,000) $ 115,000 Buildings, net During 2021, equipment with a book value of $40,000 and an original cost of $210,000 was sold at a loss of $3,000. 1. How much cash did Anders receive from the sale of equipment? 2. How much depreciation expense was recorded on equipment during 2021? 3. What was the cost of new equipment purchased by Anders during 2021? 1. Cash received from the sale of equipment 2. Depreciation expense 3. Purchase of equipmentarrow_forwardThe plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2023: Plant Asset Accumulated Depreciation $ 480,000 245,000 2,150,000 1,184,000 215,000 Land Land improvements Building Equipment Automobiles Transactions during 2024 were as follows: a. On January 2, 2024, equipment was purchased at a total invoice cost of $325,000, which included a $6,800 charge for freight Installation costs of $40,000 were incurred in addition to the invoice cost. b. On March 31, 2024, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $32,000. The fair value of the building on the day of the donation was $21,000. c. On May 1, 2024, expenditures of $63,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn't provide future benefits beyond those originally anticipated. d. On…arrow_forwardAt 30 June 2020, White Ltd reported the following cash-generating unit, with the carrying amount totaling $530,000: Land 200,000 Equipment 600,000 Accumulated (300,000) depreciation - Equipment Goodwill 30,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2020, the recoverable amount of the cash-generating unit was $480,000. For the period ending 30 June 2021, the depreciation charge on the equipment was $38,000. If the equipment had not been impaired the charge would have been $41,000. At 30 June 2021, the recoverable amount of the unit was calculated to be $15,000 greater than the carrying amount of the assets of the unit. As a result, White Ltd recognized a reversal of the previous year's impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2020 and impairment reversal at 30 June 2021.arrow_forward
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