The Newburg Flyers operate a major sports franchise from a building in downtown Newburg.The building was built in 1940 at a cost of $5 million and is fully depreciated so that it isshown on the company's balance sheet at a nominal value of $1.The land on which the building was built in 1940 was purchased in 1935 for $10,000 and isvalued at this amount for balance sheet purposes. The franchise, which is the company'sonly other major investment, cost $100,000 in 1940. Following GAAP at the time of the purchase,the franchise cost has now been fully amortized.The current assessed value of the building is $200,000. The assessed value of the land, whichis located in a prime urban area, is $20 million and reflects the net value of the propertyif the current building is demolished and replaced with an office and shopping complex. Thecurrent value of the franchise, assuming that the league owners would approve a franchisesale, is $50 million.a) Ignoring taxes in this calculation, if the team earns an income of approximately $3million per year, what is the return on investment using the following as the measure ofthe investment? Enter ROIs as percentages, no decimals.i) net book value 0ii) historical cost 59× %%b) Ignoring taxes in this calculation and assuming that the organization's cost of capital is 15%,if the team team earns approximately $3 million per year, what is the residual income usingthe following as the measure of the investment? Round answer to the nearest dollar.i) net book value? $ 0ii) historical cost? $ 0×

It is a financial ratio used to analyse the financial statements with respect to the profitability…

Answered: The Newburg Flyers operate a major…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 56P

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During the current year, Black Corporation incurred the following expenditures which should be recorded either as operating expenses or as intangible assets and name the asset and explain why you categorize particular asset. d. Black made an expenditure to acquire the patent on a popular carpet cleaner. The patent had a remaining legal life of 14 years, but Black expects to produce and sell the product for only six more years. e. Black spent a large amount to sponsor the televising of the Olympic Games. Black’s intent was to make television viewers more aware of the company’s name and its product lines.
Lany Co. received a government grant of P2,000,000 related to a factory building that it purchased in January 2022. The entity acquired the building from an industrialist identified by the government. If the entity did not purchase the building, which was located in the slums of the city, it would have been repossessed by the government agency. The entity purchased the building for P12,000,000. The useful life of the building is 5 years with no residual value. On January 1, 2025, 50% of the amount of the government grant became repayable by reason of noncompliance with conditions attached to the grant. Required: 1. Compute the government grant income recognized in 2022. 2. Assuming the deferred income approach is used, compute the loss recognized due to the repayment of the government grant. <
Paris Company owns and manages Hilton Hotel. The hotels total floor space is 10,000 sq. meters. Fifteen percent of the total floor space is occupied by the Company and used in providing ancillary services in the hotel’s occupants. As of December 31, 2018, the hotel has a carrying amount of P25,600,000 and an estimated remaining useful life of 24 years. Paris uses the straight-line method of depreciation. If the ancillary services provided to occupants are significant, how much would be shown as investment property in Paris Company’s December 31, 2019 financial statements? a. 24,533,333 b. 20,853,333 c. 23,466,667 d. 0
Silver Company purchased a machine for use in the business. The purchase price was $55,000 and the related sales tax totaled $500. Sliver paid $1,000 to have the machine delivered to its factory and $2,000 to have it assembled. Over the five-year life of the machine, maintenance cost of $800 will be incurred annually. What is the capitalized cost of this asset? Manning Company purchased a factory for $120,000. The factory included land, a building, and equipment. The land contributes 40.8%, the building contributes 49.6%, and the equipment contributes 9.6% of the factory’s value. How much of the cost should be assigned to the building? On January 1, Year 1, the Starshina Company paid $25,000 for a photocopier with an estimated useful life of 4 years, and an estimated residual value of $5,000. The company uses the straight-line method. What is the amount of depreciation expense for Year 2?
The president of Christmas Corporation donated a building to Tuesday Corporation. The building had an original cost of $675,000, a book value of $255,000, and a fair market value of $475,000. The journal entry by Tuesday Corporation to record this donation will include a debit Building for $255,000 and credit Gain for $255,000. debit Building for $675,000 and credit Gain for $200,000. debit Building for $475,000 and credit Gain for $200,000. debit Building for $475,000 and credit Gain for $475,000.
The company has recieved a donation of land from a rich local philanhropist. the land originally cost the philanhropist $48,000. on the date of the donation, it had a market value of $111,000. Make the journal entry necessary on the book of the company to record the receipt of the land
Safe Ladies' Home, Inc owns a three-storey building along Asturias. The whole building, divided into smaller rooms, is being rented out to various lady bed spacers comprising of students, reviewees and employees. The building cost is P5,000,000 with accumulated depreciation of PI,500,000 as of December 31, 2023. On this date, the building has a fair value of P5,500,000.A new building was constructed by another entity adjacent to the building of Safe Ladies' Home, Inc during 2023. Safe Ladies’ Home rented the fourth floor of the new building under operating lease and subleased the whole area to various bed spacers. At December 31, 2023, the fair value of this fourth floor is P2,000,000 and Safe Ladies’ Home chose to report it as an investment -property.At what total amount should Safe Ladies' Home report its investment property at December 31, 2023? a. P0 b. P3,500,000 c. P5,500,000 d. P7,500,000
Marjorie Company commenced operations at the beginning of the current year. The following costs are incurred by the entity: Payment for land Taxes in arrears on building on land Demolition of current building on land, net of salvage of P10,000 1,000,000 40,000 100,000 Survey before construction of new building Contract price for factory building 60,000 5,000,000 Architect fee 230,000 Payment to city hall for approval of building construction 120,000 Safety fence around construction site Safety inspection on building 35,000 30,000 20,000 Removal of safety fence after completion of factory building New fence surrounding the factory Driveways, parking bays and safety lighting Cost of trees, shrubs and other landscaping 80,000 550,000 250,000 The land and factory building should respectively be measured at
The following cases are independent. Case A Starling Ltd. bought a building for $1,330,000. Before using the building, the following expenditures were made: Repair and renovation of building Construction of new paved driveway Upgraded landscaping Wiring Deposits with utilities for connections Sign for front and back of building, attached to roof Installation of fence around property Case B Lark Company purchased a $33,400 tract of land for a new manufacturing facility. Lark demolished an old building on the property and sold the materials it salvaged from the demolition. Lark incurred additional costs and realized salvage proceeds as follows: Demolition of old building Routine maintenance (mowing) done on purchase Proceeds from sale of salvaged materials Legal fees Title guarantee insurance $129,000 35,800 4,750 16,700 2,775 17,450 14,750 $ 33,150 2,775 13,450 10,950 6,425
Wellsley Corporation purchased an old building and the land on which it is located for $70,000. The old building was demolished at a cost of $20,500. The new building that was built on the site cost $250,000. Wellsley also incurred the following costs: closing fees including commissions of $4,500, and title insurance costing $3,000. What is the correct amount to capitalize for the Land? a) $70,000 Ob) $90,500 c) $320,000 d) $98,000 e) $418,000
The following transactions involving intangible assets of Blossom Corporation occurred on or near December 31, 2020. 1. Minton paid Grand Company $360,000 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 Blossom is in business. 2. Blossom spent $540,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. 3. In January, 2021, Blossom's application for a patent (#2 above) was granted. Legal and registration costs incurred were $189,000. The patent runs for 20 years. The manufacturing process will be useful to Minton for 10 years. 4. Blossom incurred $144,000 in successfully defending one of its patents in an infringement suit. The patent expires during December, 2024. 5. Blossom incurred $432,000 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a…
Below are transactions related to Duffner Company. a. The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $81,000. b. 13,000 shares of common stock with a par value of $50 per share are issued in exchange for land and buildings. The property has been appraised at a fair value of $810,000, of which $180,000 has been allocated to land and $630,000 to buildings. The stock of Duffner Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $65 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $58 per share. c. No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead the amounts properly chargeable to plant asset accounts for machinery constructed during the year. The following information is given relative to costs of the machinery constructed. Materials used $12,500 Factory…

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