Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Question
Chapter 6, Problem 12E
a.
To determine
Ascertain the book value of office equipment.
b.
To determine
Ascertain the amount of gain or loss on the disposal.
c.
To determine
Explain the manner in which sales affects the net income of Company U.
d.
To determine
Explain the manner in which the amount of sales affects the total assets.
e.
To determine
Explain the manner in which the event affects the statement of
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Question 37
The process of transferring the cost of an asset to an expense account over time is called
A) write-off
B) write-down
C) approciation
D)
depreciation
E) all of the above
F) none of the above
Question 41
The method of determining depreciation that yields successive reductions in the periodic depreciation charge over the estimated
life of the asset is the
A) units-of-production method
B) double-declining-balance mathod
C)
straight-line method
D)
time-valuation method
Brief Exercise 8-5 (Algo) Effect of the disposal of plant assets on the financial statements LO 8-5
Mix & Match Company sold office equipment with a cost of $48,600 and accumulated depreciation of $33,000 for $28,000 cash.
Required:
a. What is the amount of gain or loss on the disposal?
b. How would the sale affect net income (increase, decrease, no effect)?
c. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect)?
d. How would the event affect the statement of cash flows (inflow, outflow, no effect)?
a.
b. Effect of sale on net income
c. Effect of sale on total assets
d. Effect of sale on statement of cash flows
Exercise 8-11A Effect of the disposal of plant assets on the financial statements
A plant asset with a cost of $40,000 and accumulated depreciation of $36,000 is sold for $6,000.
Required
a. What is the book value of the asset at the time of sale?
b. What is the amount of gain or loss on the disposal?
c. How would the sale affect net income (increase, decrease, no effect) and by how much?
d.
How would the sale affect the amount of total assets shown on the balance sheet (increase,
decrease, no effect) and by how much?
e. How would the event affect the statement of cash flows (inflow, outflow, no effect) and in
what section?
LO 4
Chapter 6 Solutions
Survey Of Accounting
Ch. 6 - 1. What is the difference between the functions of...Ch. 6 - Prob. 2QCh. 6 - Prob. 3QCh. 6 - 4. Define depreciation. What kind of asset...Ch. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - 8. Explain the historical cost concept as it...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - 12. Explain straight-line, units-of-production,...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - 17. What is salvage value?Ch. 6 - Prob. 18QCh. 6 - Prob. 19QCh. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - 22. Why would a company choose to depreciate one...Ch. 6 - Prob. 23QCh. 6 - 27. How are capital expenditures made to improve...Ch. 6 - Prob. 25QCh. 6 - Prob. 26QCh. 6 - Prob. 27QCh. 6 - Prob. 28QCh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - LO 8-1 Exercise 8-6 A Allocating costs for a...Ch. 6 - Effect of depreciation on the accounting equation...Ch. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Events related to the acquisition, use, and...Ch. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Accounting for acquisition of assets, including a...Ch. 6 - Calculating depreciation expense using three...Ch. 6 - Determining the effect of depreciation expense on...Ch. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Revision of estimated salvage value Delta Machine...Ch. 6 - Purchase and use of tangible asset: Three...Ch. 6 - Recording continuing expenditures for plant assets...Ch. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Performing ratio analysis using real-world data...Ch. 6 - Prob. 1ATCCh. 6 - ATC 6-3 Research Assignment Comparing Microsofts...Ch. 6 - Prob. 4ATCCh. 6 - ATC 6-5 Ethical Dilemma Whats an expense? Several...
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Identify each item by letter and list the amounts in columnar form, as follows: Item Land Land improvements Building Other Accounts 2.Determine the amount debited to Land, Land Improvements, and Building. 3.The costs assigned to the land, which is used as a plant site, will not be depreciated, while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. 4.What would be the effect on the current years income statement and balance sheet if the cost of filling and grading land of 12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.arrow_forwardAllocating payments and receipts to fixed asset accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk. a. Fee paid to attorney for title search 3,600 b. Cost of real estate acquired as a plant site: Land 720,000 Building (to be demolished) 60,000 c. Finders fee paid to real estate agency 23,400 d. Delinquent real estate taxes on property, assumed by purchaser 15,000 e. Architects and engineers fees for plans for new building 75,000 f. Cost of removing building purchased with land in (b) 10,000 g. Proceeds from sale of salvage materials from old building 3,400 h. Cost of filling and grading land 18,000 i. Premium on one-year insurance policy during construction. 8,400 j. Money borrowed to pay building contractor 800,000 k. Special assessment paid to city for extension of water main to the property 13,400 1. Cost of repairing windstorm damage during construction 3,000 m. Cost of repairing vandalism damage during construction 2,000 n. Cost of trees and shrubbery planted 14,000 o. Cost of paving parking lot to be used by customers 21,600 p. 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