Jersey Corporation, which has a calendar year accounting period, purchased a machine for $400,000 on April 1, 2016. At that time Jersey expected to use the machine for nine years and then sell it for $4,000. The machine was sold for $22,000 on Sept. 30, 2021. Assuming straight-line depreciation, calculate the gain(/(loss) at the sale of the machine.
Q: On April 1, 2021, DG Corporation purchased an equipment with cost of P150,000. The company estimate…
A: From April 1, 2021 to December 31, 2021 = 9 months Depreciation on equipment will be charged for 9…
Q: What is the accumulated depreciation as of December 31, 2017?
A: The Double declining balance is one of the two accelerated depreciation methods, and it uses a…
Q: At the beginning of 2016, Robotics Inc. acquired a manufacturing facility for $12 million. $9…
A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…
Q: JME acquired a depreciable asset on January 1, 2014, for $60,000 cash. At that time JME estimated…
A: Calculate the depreciation expense for first two years.
Q: The KOBE Company acquired a drilling machine on October 1,2013 at a cost of $250,000 and depreciated…
A: Capital Expenditure: It is the amount invested by a company to acquire, upgrade, and maintain…
Q: The Collins Corporation purchased office equipment at the beginning of 2014 and capitalized a cost…
A: 1.
Q: Coppola Company purchased a machine on January 1, 2016, for $20,000 cash. In addition, Coppola paid…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: On January 1, 2024, Tyson Manufacturing Company purchased a machine for $40,800,000. Tyson's…
A: Units-of-production method is one of method used to calculate depreciation expense, this…
Q: On January 1, 2017, Global Manufacturing purchased a machine for $540,000 that it expected to have a…
A: disposal of assets:- It involves eliminating assets from accounting records. Loss on sale. Debit…
Q: On March 10, 2020, Waterway Limited sold equipment that it bought for $266,880 on August 21, 2013.…
A: Depreciation: When a new fixed asset is purchased, it does not have the price that was at the time…
Q: On March 10, 2020, Pearl Limited sold equipment that it bought for $134,640 on August 21, 2013. It…
A: the question is based on the concept of Depreciation Accounting. As per the Bartleby guidelines we…
Q: CEE Corporation purchased a machine on January 1, 2016 by instalment, initially paying $1,000,000,…
A: Depreciation - It refers to the fall in the value of fixed assets due to wear and tear. It is a…
Q: Preyer Industries purchased a lathe for $65,000 on 1/1/15. It will have an estimated life of eight…
A: The double declining balance is an accelerated cost recovery system
Q: CEE Corporation purchased a machine on January 1, 2016 by instalment, initially paying ₱1,000,000,…
A: In case of purchase of fixed asset under instalment method, then amount paid by way of number of…
Q: On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a…
A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…
Q: Calculate the company's taxable profit and hence its tax payable for 2017. (ii) Determine the…
A: First of all, the timing difference need to be calculated as follows: Machine A/c base Tax base…
Q: Mango Co. owns a machine that was bought on January 1, 2017, for P752,000. The machine was…
A: Depreciation Expenses:- These are those expenses that appear in the income statement of the company,…
Q: Lehman Corporation purchased a machine on January 2, 2017, for $4,000,000. The machine has an…
A: The correct answer is option a, that is, $144,000.
Q: Tiger Ltd purchased a machine on 1 July 2017 at the cost of $640,000. The machine is expected to…
A: Depreciation is the reduction in the value of asset due to obsolesce, wear and tear or usage.…
Q: On January 2, 2022, Lauren Corporation purchased factory equipment for $850,000. In addition, it…
A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…
Q: On January 1, 2018, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected…
A: Depreciation refers to the permanent/fall/decline/decrease in the value of asset pertaining to many…
Q: ABC, Inc. purchased a crane on January 1, 2018, for P205,500. At the time of purchase, the crane was…
A: ABC, Inc. purchased a crane on January 1, 2018, for P205,500. At the time of purchase, the crane was…
Q: Sheffield Corp., which has a calendar year accounting period, purchased a new machine for $90000 on…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: costing $40,000. Woodstock also paid $1,000 for transportation and installation. The expected useful…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: On April 1, 2014, Brandy Company has a machine with a cost of P1,000,000 and accumulated…
A: In order to determine the carrying value of the assets, the accumulated depreciation is required to…
Q: Funseth Company purchased a five-story office building on January 1, 2014, at a cost of $5,000,000.…
A: Calculate Depreciation expenses on building.
Q: Nanki Corporation purchased equipment on January 1, 2014, for $616,000. In 2014 and 2015, Nanki…
A: Depreciable cost is used to compute the depreciation, and it is calculated by subtracting its value…
Q: On March 10, 2020, Waterway Limited sold equipment that it bought for $266,880 on August 21, 2013.…
A: Depreciation: It is an expense incurred in the day-to-day normal use of assets during the…
Q: On January 2, 2018, Lem Corp. bought machinery under a contract that required a down payment of…
A: Depreciation is the method of accounting which is used for allocating the cost of physical or…
Q: A machine is purchased on May 1, 2017 costing 1,500,000 with useful life of 5 years and a residual…
A:
Q: XYZ Company, a calendar year business, purchased machinery on February 2, 2016. The purchase price…
A: Lets understand the basis. As per IAS 16 "Property plant and equipment" initially needs to record at…
Q: Ayayai Corporation purchased machinery on January 1, 2022, at a cost of $252,000. The estimated…
A: Fixed asset: It is a long-term asset used in the business for long period and is depreciated for its…
Q: On January 1, 2024, Tyson Manufacturing Corporation purchased a machine for $40,000,000. Tyson's…
A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…
Q: A company purchased a new machine on May 1, 2012 for $528,000. At the time of acquisition, the…
A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…
Q: On March 10, 2022, Bonita Company sells equipment that it purchased for $209,280 on August 20, 2015.…
A: Depreciation is an accounting technique for distributing a tangible or fixed asset's cost over its…
Q: Bolan Company purchased a tooling machine on January 3, 2014 for $500,000. The machine was being…
A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…
Q: The BAKAL Company purchased a machine on November 1, 2011, for P148,000. At the time of…
A: Straight line method of Depreciation The purpose calculating the depreciation is to identified the…
Q: Martin bought a machine for £50,000 on 1st of April 2017, The machine is expected to have a useful…
A: given that, cost of asset = £50000 useful life of asset = 5years residual value of asset = £5000…
Q: ABC, Inc. purchased a crane on January 1, 2018, for P205,500. At the time of purchase, the crane was…
A: Under straight line method of recording depreciation, equal amount of depreciation expense is…
Q: At the beginning of 2014, Robotics Inc. acquired a manufacturing facility for $12 million. $9…
A:
Q: On January 1, 2016, Margo Company acquired machinery at a cost of $160,000. This machinery was being…
A: Solution.. Life of the asset = 5 years Rate of depreciation under double Declining method = 200%…
Q: On January 1, 2018, Hobart Mfg. Co. purchased a drill press at a cost of $21,900. The drill press is…
A: Deprecation per unit = (Cost of drill press - Residual value)/ Expected production in units =…
Q: Show the calculation of the amount of gain or loss to be recognized by Susan Co. from the exchange.
A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due…
Q: At the beginning of 2016, Robotics Inc. acquired a manufacturing facility for $13.2 million. $10.2…
A: Working Note 1: Compute the depreciation under the straight-line method for the year 2016.
Q: Blue Co. purchased an equipment on March 1, 2015, made a 50% down payment, and the balance will be…
A: The question is based on the concept of Depreciation Accounting. Depreciation is the decrease on the…
Q: On December 31,2015, DAVE Corporation purchased an equipment with an estimated useful life of 10…
A: Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage ,…
Jersey Corporation, which has a calendar year accounting period, purchased a machine for $400,000 on April 1, 2016. At that time Jersey expected to use the machine for nine years and then sell it for $4,000. The machine was sold for $22,000 on Sept. 30, 2021. Assuming straight-line
Step by step
Solved in 2 steps
- Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
- 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.On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.
- Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?Concord Corporation, which has a calendar year accounting period, purchased a new machine for $95400 on April 1, 2016. At that time Concord expected to use the machine for nine years and then sell it for $9540. The machine was sold for $50800 on Sept. 30, 2021. Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation in the year of retirement, the gain to be recognized at the time of sale would be O $3100. O $0. O $9540. O $5100. O O O
- Sheffield Corp., which has a calendar year accounting period, purchased a new machine for $90000 on April 1, 2016. At that time Sheffield expected to use the machine for nine years and then sell it for $9000. The machine was sold for $49100 on Sept. 30, 2021. Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation in the year of retirement, the gain to be recognized at the time of sale would be O $0. O $6100. O $4100. O $9000.Orton Corporation, which has a calendar year accounting period, purchased a new machine for $80,000 on April 1, 2016. At that time Orton expected to use the machine for nine years and then sell it for $8,000. The machine was sold for $44,000 on Sept. 30, 2021. Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation in the year of retirement, the gain to be recognized at the time of sale would be:On January 1, 2017, Extensive Manufacturing purchased a machine for $780,000 that it expected to have a useful life of four years. The company estimated that the residual value of the machine was $60,000. Extensive Manufacturing used the machine for two years and sold it on January 1, 2019, for $150,000. As of December 31, 2018, the accumulated depreciation on the machine was $360,000. Read the requirements. 1. Calculate the gain or loss on the sale of the machinery. Extensive Manufacturing will record a of $ on the sale of the machinery.
