Presented below is information related to equipment owned by Sunland Company at December 31, 2020. Cost $10,170,000 Accumulated depreciation to date 1,130,000 Expected future net cash flows 7,910,000 Fair value 5,424,000 Assume that Sunland will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years.

Presented below is information related to equipment owned by Sunland Company at December 31, 2020. Cost $10,170,000 Accumulated depreciation to date 1,130,000 Expected future net cash flows 7,910,000 Fair value 5,424,000 Assume that Sunland will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following transactions involving intangible assets of Oriole Corporation occurred on or near December 31, 2020. 1. Minton paid Grand Company $440,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Oriole is in business. Oriole spent $600,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. 2. In January, 2021, Oriole's application for a patent (#2 above) was granted. Legal and registration costs incurred were $249,900. The patent runs for 20 years. The manufacturing process will be useful to Minton for 10 years. Oriole incurred $180,800 in successfully defending one of its patents in an infringement suit. The patent expires during 3. 4. December, 2024. Oriole incurred $470,400 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a remaining unamortized cost of $241,920, is…
Presented below is information related to equipment owned by Sunland Company at December 31, 2020. Cost $10,170,000 Accumulated depreciation to date 1,130,000 Expected future net cash flows 7,910,000 Fair value 5,424,000 Assume that Sunland will continue to use this asset in the future. As of December 31, 202O, the equipment has a remaining useful life of 4 years. (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (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 Account Titles and Explanation Debit Credit Dec. 31 Loss on Impairment 3616000 Accumulated Depreciation-Equipment 3616000
Coronado Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2020, Coronado entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $9,000 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $7,000. In addition, Walleye agrees to pay an additional $18,000 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract. (a) Your Answer Correct Answer Your answer is correct. Prepare the journal entries for Coronado in 2020 and 2021 related to this service contract. (Credit account titles are automatically indented when the amount is entered. Do not indent…
Coronado Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2020, Coronado entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $9,000 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $7,000. In addition, Walleye agrees to pay an additional $18,000 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract. (a) Your Answer Correct Answer Your answer is correct. Prepare the jourmal entries for Coronado in 2020 and 2021 related to this service contract. (Credit account titles are automatically indented when the amount is entered. Do not indent…
Question 9 of 9 Cullumber Enterprises Ltd. has entered into a contract beginning in February 2023 to build two warehouses for Ivanhoe Structures Ltd. The contract is a non-cancellable fixed-price contract for $9.5 million. Billings and collections are lower in 2025 by $500,000 each. The following data pertain to the construction period (all figures in thousands). Costs for the year Estimated costs to complete Progress billings for the year (non-refundable) Cash collected for the year 2023 $4,185 5,115 3,860 2024 5.115 388 4,540 2025 200 -0- 1,100 3,300 4,590 1,910
On December 31, 2019, Nash Inc. borrowed $3,300,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $396,000: June 1, $660,000: July 1, $1,650,000: December 1, $1.650,000. The building was completed in February 2021. Additional information is provided as follows 1. 2. 3. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually 6-year, 11% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $165,000 Interest revenue earned in 2020 Your answer is incorrect. $4,400,000 $1,760,000 The amount of interest $ $53.900 Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
Prepare the journal entry; to record depreciation expense for 2024. (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. List debit entry before credit entry.) Date
On January 1, 2022, Sandhill Co. had a balance of $411,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions. Jan. 2 Purchased a patent (7-year life) $307,650. July 1 Sept. 1 Acquired a 9-year franchise; expiration date July 1, 2,031, $576,000. Research and development costs $178,500.
At the end of 2023, Novak Corporation owns a licence with a carrying amount of $508,000. Novak expects undiscounted future cash flows from this licence to total $512,500. The licence's fair value is $404,000 and disposal costs are estimated to be nil. The licence's discounted cash flows (that is, value in use) are estimated to be $458,000. Assume that the licence was granted in perpetuity and has an indefinite life, and that Novak prepares financial statements in accordance with ASPE. Assume that the licence was granted in perpetuity and has an indefinite life. Determine if the licence is impaired at the end of 2023. The licence Prepare any related entry that is necessary. (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 O for the amounts. List debit entry before credit entry.) at the end of 2023. Account Titles and Explanation eTextbook and Media List of…
Nash Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO cost-or-market at December 31, 2019, and December 31, 2020. This information is presented below: Cost Lower-of-Cost-or-Market 12/31/19 $317,820 $ 297,230 12/31/20 444,060 427,160 (a) Prepare the journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market, and a perpetual inventory system (cost-of-goods-sold method) is used. (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.) Date Account Titles and Explanation Debit Credit 12/31/19 12/31/20 (b) Prepare journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market under a perpetual system (loss method is used). (Credit account titles are automatically indented when amount is…
Exercise 12-06 Pharoah Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (7-year life) $304,500 4/1/20 Purchase goodwill (indefinite life) 345,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 425,000 8/1/20 9/1/20 Payment of copyright (5-year life) 150,000 Research and development costs 215,000 $1,439,500 Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (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 0 for the amounts.) Account Titles and Explanation Debit Credit
Riverbed Company manufactures equipment. Riverbed's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $ 200,000 to $ 1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Riverbed has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Riverbed for a price of $ 1,100,000 and contracts with Riverbed to install the equipment. Riverbed charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Riverbed determines installation service is estimated to have a standalone selling price of $ 46,000. The cost of the equipment is $ 580,000. Winkerbean is obligated to pay Riverbed the $ 1,100,000 upon the delivery and…