A machine that produces cellphone components is purchased on January 1, 2024, for $171,000. It is expected to have a useful life of four years and a residual value of $12,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2024, 50,000 in 2025, 60,000 in 2026, and 50,000 in 2027. The company has a December 31 year end. (a) Calculate the amount of depreciation to be charged each year, using each of the following methods: I. Straight-line method Straight-line method depreciation Senter a dollar amount per year per year ii. Units-of-production method (Round depreciation per unit to 3 decimal places, e.g. 15.257 and depreciation expense to 0 decimal places, e.g. 125.) Units-of-production method depreciation Senter a dollar amount per unit rounded to 3 decimal places per unit Year Depreciation Expense 2024 Senter a dollar amount 2025 Senter a dollar amount 2026 Senter a dollar amount 2027 Senter a dollar amount iii. Double-diminishing-balance method Rate enter percentages % Year Depreciation Expense 2024 Senter a dollar amount 2025 $enter a dollar amount 2026 Senter a dollar amount 2027 Senter a dollar amount

A machine that produces cellphone components is purchased on January 1, 2024, for $171,000. It is expected to have a useful life of four years and a residual value of $12,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2024, 50,000 in 2025, 60,000 in 2026, and 50,000 in 2027. The company has a December 31 year end. (a) Calculate the amount of depreciation to be charged each year, using each of the following methods: I. Straight-line method Straight-line method depreciation Senter a dollar amount per year per year ii. Units-of-production method (Round depreciation per unit to 3 decimal places, e.g. 15.257 and depreciation expense to 0 decimal places, e.g. 125.) Units-of-production method depreciation Senter a dollar amount per unit rounded to 3 decimal places per unit Year Depreciation Expense 2024 Senter a dollar amount 2025 Senter a dollar amount 2026 Senter a dollar amount 2027 Senter a dollar amount iii. Double-diminishing-balance method Rate enter percentages % Year Depreciation Expense 2024 Senter a dollar amount 2025 $enter a dollar amount 2026 Senter a dollar amount 2027 Senter a dollar amount

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

Build a Bridge Inc. prepares its financial statements in accordance with IFRS. The company started work on a contract in May 2023 to build a small bridge at a fixed price of $10,000,000. The bridge was to be completed by September 2025 at a total estimated cost of $8,000,000. Total cumulative costs incurred by the end of December 2023 and 2024 were $2,000,000 and $5,500,000, respectively. Because of cost overruns in 2024, it is now expected that the project will cost $800,000 more than originally estimated. Final costs at the end of the project totalled $9,000,000. Required Determine the amount of gross profit to be recognized for the years ending December 31, 2023 and 2024. First calculate the percent complete on December 31, 2023. The percent complete on December 31, 2023 is %.
On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 32 March 1, 2024 June 30, 2024 October 1, 2024 January 31, 2025 April 30, 2025 August 31, 2025 On January 1, 2024, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2024 and 2025. The company's other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31. Required: Using the weighted-average interest method, answer the following questions: $ 1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 1.…
On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,080,000 March 1, 2021 900,000 June 30, 2021 320,000 October 1, 2021 700,000 January 31, 2022 720,000 April 30, 2022 1,035,000 August 31, 2022 1,800,000 On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $5,000,000 and $7,000,000 with interest rates of 5% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31. Required: Calculate the amount of interest that Mason should…
On January 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 $ 609000 September 1, 2020 1802400 December 31, 2020 1802400 March 31, 2021 1802400 September 30, 2021 1203000 Bonita Industries borrowed $3400000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $13320000 in 9% bonds outstanding in 2020 and 2021.The interest capitalized for 2020 was: A)$505656 B)$108882 C)$145176 D)$289368
Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $159 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Years 2023 2024 2025 Actual costs incurred in each year $ 43 million $ 71 million $ 48 million Years 2023 2024 2025 Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project? Note: Enter "None" if there is no requirement of recognizing profit or loss. Loss amounts should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Gross Profit (or Loss) recognized Gross profit Gross profit Gross profit Estimated remaining costs to complete t project (measured at December 31 of each year) $ 86 million. $ 71…
Metlock Company began construction of a new building during 2025. The building is expected to be completed on December 31, 2025. During 2025, payments to the contractor are $540,000 on January 4, $252,000 on May 1, and $456,000 on October 1. Metlock has secured a construction loan of $506,000 at 6% interest on January 4, 2025. The company also has $8,850,000 in 9% bonds outstanding in 2026 and 2025. What is the interest amount to capitalize? Interest to capitalize $
Vishnu
Curtiss Construction Company, Incorporated, entered into a fixed price contract with Axelrod Associates on July 1, 2024, to construct a four story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,240,000 The building was completed on December 31, 2026 Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows Percentage of completion Cests incurred to date Estimated costs to complete Billings to Axelrod, to date Required: At 12-11-2024 10% At 12-31-2025 $2,688,000 1,792,000 AT 12-11-2026 60% 100% $ 4,534,000 4,240,000 $363,000 3,267,000 724,000 2,250,000 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue…
YellowStone Construction is constructing an office building under contract for LimeStone Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1300000 each quarter. The total contract price is $15600000 and YellowStone estimates total costs of $17500000. YellowStone estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2022, YellowStone Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $17750000 due to unanticipated price increases.YellowStone Construction completes the remaining 25% of the building construction on December 31, 2023, as scheduled. At that time the total costs of construction are $18500000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that YellowStone will recognize for the year ended December 31, 2023? Revenue Expenses…
Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $149 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Years 2023 2024 2025 Actual costs incurred in each year $ 42 million $ 69 million, $ 47 million Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project? Years 2023 2024 2025 Note: Enter "None" if there is no requirement of recognizing profit or loss. Loss amounts should be indicated with a minus sign. Enter your answers in millions (1.e., 10,000,000 should be entered as 10). Estimated remaining costs to complete the project (measured at December 31 of each year) $ 84 million $ 69 million $0 million Gross Profit (or Loss) recognized million million…
Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Amber paid for the lathe by issuing a $700,000, three-year note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 12% was a reasonable rate of interest. Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2024, for Truax Corporation’s sale of the lathe. Assume Truax spent $500,000 to construct the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity for Truax. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1,…
Metlock Company began construction of a new building during 2025. The building is expected to be completed on December 31, 2025. During 2025, payments to the contractor are $540,000 on January 4, $252,000 on May 1, and $456,000 on October 1. Metlock has secured a construction loan of $506,000 at 6% interest on January 4, 2025. The company also has $8,850,000 in 9% bonds outstanding in 2026 and 2025. What is the interest amount to capitalize? Interest to capitalize $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer