Falcon Enterprises starts the year with $15,000 in its cash account, $12,500 in its equipment account, $3,000 in accumulated depreciation, and $22,000 in its retained earnings account. During the year, Falcon Enterprises sells the equipment for $9,200. After the sale of equipment is recorded, the retained earnings account will have a balance of $
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- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.Dillard Company starts the year with $10,000 in its cash account, $10,000 in its equipment account, $2,000 in accumulated depreciation, and $18,000 in its retained earnings account. During the year Dillard sells the equipment for $8,570. After the sale of equipment is recorded, the retained earnings account will have a balance of $ory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,300 annually, after deducting all expenses except depreciation. Calculate annual depreciation expenses using double-declining-balance method.Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation.
- Tory Enterprises pays $238,400 for equipment that will last five years and have a $43,600 salvage value. By using the equipment in its operations for five years, the company expects to earn $88,500 annually, after deducting all expenses except depreciation. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation is used.On January 1, 2021, Famous Inc. acquired a piece of equipment for a list price of $340,000. It paid $50,000 cash and issued a 3-year note payable for the remainder. The note requires annual payments of a 3% interest every December 31. Famous Ic. also paid $16,000 to install the equipment, and $6,000 to test it. At the end of the testing, the company was able to obtain an output of good quality and sold it for $2,300. Famous Inc.'s incremental borrowing rate is 5%. The equipment's useful life is $80,000 at the end of its 10-year useful life. It was ready for use on March 31, 2021, but the company started using it on April 30th, 2021. Famous is a public company and uses the straight-line method to depreciate its equipment. Required- 1- Prepare the journal entry to record the acquisition of the equipment. 2- Prepare the required adjusting entries on December 31, 2021.On July 1, 2020, Marin Inc. made two sales: 1. It sold excess land in exchange for a four-year, non–interest-bearing promissory note in the face amount of $1,165,880. The land’s carrying value is $640,000. 2. It rendered services in exchange for an eight-year promissory note having a face value of $480,000. Interest at a rate of 2% is payable annually. The customers in the above transactions have credit ratings that require them to borrow money at 11% interest. Marin recently had to pay 7% interest for money it borrowed from British Bank. 3. On July 1, 2020, Marin also agreed to accept an instalment note from one of its customers in partial settlement of accounts receivable that were overdue. The note calls for four equal payments of $21,000, including the principal and interest due, on the anniversary of the note. The implied interest rate on this note is 9%. Required: 1. Prepare the journal entries to record the three notes receivable transactions of Marin…
- The company ‘El Camion’ sells machinery. It sells large tonnage trucks in two forms:1.- A cash instalment of 30 million plus 6 half-yearly instalments of 50 million each.2.- Cash payment of $299,518,114. This company gave mining company ‘Los 33’ a credit on 01-07-2009. In the AMORTIZED COST table (IFRS 9) of this sale, the END BALANCE for the first period amounts to $228,007,935.It is requested:1) Make the opening accounting entry for ‘El Camion' for the sale.2) Make the development table in EXCEL spreadsheet of the amortised cost.3) Make the accounting entries for the first payment.4) After making the payment of the 2nd instalment, ‘Los 33’ inform ‘El Camion’ that they have problems to pay the rest of the instalments. They estimate that they will only be able to pay 40% of each remaining instalment. Make the accounting entry for this fact.Celia Corp. has estimated that total depreciation expense for the year ending 12/31/20 will amount to $600,000, and that 2020 year-end bonuses to employees will total $1,200,000. In Celia's interim income statement for the six months ended 6/30/20, what is the total amount of expense relating to these two items that should be reported? a. $0. b. $300,000. c. $900,000. d. $1,800,000.A chemical company has a total income of 1.62 million per year and total expenses of 716057 not including depreciation. At the start of the first year of operation, a composite account of all depreciable assets shows a value of 1.24 with a MACRS recovery period of 7 years, and a straight-line recovery period of 9.4 years. Thirty-five percent of all profits before taxes must be paid out for income taxes. What would be the reduction in income tax charges for the first year of operation if the MACRS method were used for the depreciation accounting instead of the straight-line method?-
- During the current year, Adrienne Company purchased a second hand machine at a price of P5,000,000. A cash payment of P1,000,000 was made and a two-year, noninterest bearing note was issued for the balance of P4,000,000. Recent transactions involving similar machine indicate that the used machine has a second hand market value of P4,500,000. A new machine would cost of P6,500,000. The following costs were incurred during the year. Cost of removing old machine that is replaced Cash proceeds from the sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdown 350,000 100,000 220,000 80,000 Cost of installation 180,000 Cost of testing machine prior to use Cost of hauling the machine from vendor to entity premises Cost of repairing damage to machine caused when the machine was dropped during installation 150,000 40,000 50,000 Repairs incurred during the first year of operation Safety device added to the machine…At the beginning of the current year, Andy Company has equipment that originally cost $70,000, has $49,000 accumulated depreciation, and is being depreciated at $7,000 per year. Andy sells this equipment for $16,000 at the end of the current year.PPP Company sold $5 million of protective equipment during the current year of operations. The company received payments of $4.4 million from its customers for these goods. The company's income statement for the current year would report?