Aan Company purchased machinery on January 1, 2023, for $50,000. The machinery has an estimated useful life of 10 years and a residual value of $5,000. The company uses the straight-line method for depreciation. Calculate the annual depreciation expense and the accumulated depreciation at the end of three years. Explain your steps. YanZ Corporation, a retail company, started operations on January 1, 2022, with an initial capital of $150,000. Throughout the year, the company made cash sales totalling $200,000 and credit sales of $80,000. The cost of goods sold (COGS) was 60% of total sales. Operating expenses amounted to $50,000, and the company had collected $60,000 in cash from its credit sales by year-end. Additionally, YanZ paid dividends of $15,000. Prepare an income statement and calculate the ending balance in the retained earnings account as of December 31, 2022.

Aan Company purchased machinery on January 1, 2023, for $50,000. The machinery has an estimated useful life of 10 years and a residual value of $5,000. The company uses the straight-line method for depreciation. Calculate the annual depreciation expense and the accumulated depreciation at the end of three years. Explain your steps. YanZ Corporation, a retail company, started operations on January 1, 2022, with an initial capital of $150,000. Throughout the year, the company made cash sales totalling $200,000 and credit sales of $80,000. The cost of goods sold (COGS) was 60% of total sales. Operating expenses amounted to $50,000, and the company had collected $60,000 in cash from its credit sales by year-end. Additionally, YanZ paid dividends of $15,000. Prepare an income statement and calculate the ending balance in the retained earnings account as of December 31, 2022.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

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Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
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