**Diaz Company Machine Disposal Accounting**Diaz Company owns a machine that initially cost $126,300 and has accumulated depreciation of $93,000. To accurately record the disposal of this machine on January 1, we must consider each situation separately.1. **Scenario 1:** The machine required extensive repairs and was deemed not worth repairing. Consequently, Diaz disposed of the machine without receiving anything in return.2. **Scenario 2:** Diaz sold the machine for $16,600 in cash.3. **Scenario 3:** Diaz sold the machine for $33,300 in cash.4. **Scenario 4:** Diaz sold the machine for $40,400 in cash.### Journal Entry Worksheet- **Tabs:** The worksheet includes four tabs to record each scenario separately.- **Instructions:** Record the disposal of the machine according to each scenario. Ensure that debits are entered before credits, as noted below the entry fields.### Journal Entry Interface- **Date Field:** The default date provided is January 01.- **General Journal Columns:** There are columns to enter the description, debit, and credit amounts. - **Buttons:** - "Record entry" allows saving the current entry. - "Clear entry" deletes input in the form. - "View general journal" displays all recorded entries.Use this worksheet as a practical exercise in handling asset disposals under different financial outcomes.

Solution: Journal entry: Date General Journal Debit $…

Answered: lisposal of the machine on January 1 in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Timmy paid $800,000 cash for all of the assets of Bob’s Chicken Fried Steak Shack, Inc. (Bob’s). Timmy did not buy the stock of Bob’s; rather he bought all of Bob’s assets from Bob’s. Here is a list of the physical assets that Timmy got for his $800,000, showing the stand-alone FMV of each category:*** Land & Building, $350,000 Furniture & Equipment, $160,000 Inventory, $15,000 Bob’s latest property tax appraisal from Dallas County showed the land value at $150,000, the building at $100,000, the furniture and equipment at $75,000. What is Timmy’s depreciable basis in the building? What is Timmy’s depreciable basis in the furniture and equipment? What amount will Timmy eventually record as COGS with respect to the purchased inventory? How much, if any, goodwill did Timmy purchase? Address each item separately. (Each part must be correctly answered to earn a point for this item (3).) *** These FMVs are as agreed and stated in the negotiated Purchase Agreement.
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Amy is a business owner who purchased a policy of business insurance providing 1,000,000 limits for 1st party coverages. Covid and inflation has cut into her profits so she chose to purchase an actual cash value 1 party coverage limit as opposed to replacement cost. Unfortunately she had a fire and all of the contents of her office building were destroyed (computers, copying machine, phones etc.) Amy's office contents were quite old and had a value at the time of the fire of $550,000. The cost to replace these items, however, was $975,000. Amy is glad she purchased 1,000,000 limits thinking she will be able to buy new contents to replace the destroyed ones without having to spend any $. After all her limits are less than the cost to replace. Is she correct? Explain.

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