FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Question
Chapter 8, Problem 13QS
To determine
Total Asset Turnover Ratio:
Total asset turnover ratio is a ratio which is used to check the effectiveness and efficiency of the business operations and is computing by division of net sales by total assets.
Total asset turnover ratio.
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Recording Asset Retirement Obligation
BPP Company maintains underground storage tanks for its operations. A new storage tank was installed and made ready for use at a cost of
$2,000,000 on January 1 of the current year. The tank's useful life is estimated at 15 years, at which time the company is legally required to
remove the tank and restore the area at an estimated cost of $200,000. The appropriate discount rate for the company is 12%.
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a. On January 1, record the entry for (1) the purchase and installation of the storage tank and (2) the related asset retirement obligation.
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c. Assume that on December 31, fifteen years later, the tank is safely removed at a cost of $230,000. Record the required journal entry.
Note: Round answers to the nearest whole dollar.
a. 1. Jan. 1
a. 2. Jan. 1
b. 1. Dec. 31
M
b. 2. Dec. 31
Account Name
Equipment
Cash
To record purchase of storage tank…
Recording Asset Retirement Obligation
BPP Company maintains underground storage tanks for its operations. A new storage tank was installed and made ready for use at a cost of $2,000,000 on January 1 of the current year. The tank's useful life is estimated at 15 years, at which time the company is legally required to remove the tank and restore the area at an estimated cost of $200,000. The appropriate discount rate for the
company is 12%.
Required
a. On January 1, record the entry for (1) the purchase and installation of the storage tank and (2) the related asset retirement obligation.
b. Record adjusting entries on December 31 of the current year for (1) depreciation and (2) accretion.
c. Assume that on December 31, fifteen years later, the tank is safely removed at a cost of $230,000. Record the required journal entry.
Note: Round answers to the nearest whole dollar.
a. 1. Jan. 1
a. 2. Jan. 1
b. 1. Dec. 31
b. 2. Dec. 31
c. Dec. 31, Year 15
Account Name
To record purchase of storage…
On January 1 of this year, Diaz Boutique pays $185,000 to modernize its store. Improvements include new floors, ceilings, wiring, and
wall coverings. These improvements are estimated to yield benefits for 10 years. Diaz leases (does not own) its store and has 8 years
remaining on the lease.
1. & 2. Prepare the journal entry to record the cost of modernization and amortization at the end of this current year.
No
1
Date
January 01
Leasehold improvements
Cash
2
December 31
Answer is complete but not entirely correct.
General Journal
Debit
185,000
Credit
185,000
Amortization expense-Leasehold improvements
Cash
30
185,000
185,000
Chapter 8 Solutions
FINANCIAL ACCT.FUND.(LOOSELEAF)
Ch. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - A company purchased machinery for $10,800,000 on...Ch. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 1DQCh. 8 - What is the general rule for cost inclusion for...Ch. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQ
Ch. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQCh. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Prob. 3QSCh. 8 - Prob. 4QSCh. 8 - Prob. 5QSCh. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Prob. 10QSCh. 8 - Prob. 11QSCh. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Prob. 14QSCh. 8 - Prob. 15QSCh. 8 - Prob. 16QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Prob. 14ECh. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - Prob. 23ECh. 8 - Prob. 24ECh. 8 - Plant asset costs; depreciation methods C1 P1...Ch. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Prob. 6PSACh. 8 - Prob. 7PSACh. 8 - Prob. 8PSACh. 8 - Plant asset costs; depreciation methods C1 P1 Nagy...Ch. 8 - Prob. 2PSBCh. 8 - Prob. 3PSBCh. 8 - Prob. 4PSBCh. 8 - Prob. 5PSBCh. 8 - Prob. 6PSBCh. 8 - Prob. 7PSBCh. 8 - Prob. 8PSBCh. 8 - Prob. 8SPCh. 8 - Prob. 1AACh. 8 - Prob. 2AACh. 8 - Comparative figures for Samsung, Apple, and Google...Ch. 8 - Prob. 1BTNCh. 8 - Prob. 2BTNCh. 8 - Prob. 3BTNCh. 8 - Prob. 4BTNCh. 8 - Review the chapter’s opening feature involving Deb...Ch. 8 - Prob. 6BTN
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