Mathews Bus Service traded in a used bus for a new one. The original cost of the old bus was$52,000. Accumulated depreciation at the time of the trade-in amounted to $34,000. The new buscost $65,000, but Mathews was given a trade-in allowance of $10,000.a. What amount of cash did Mathews have to pay to acquire the new bus?b. Compute the gain or loss on the disposal for financial reporting purposes.c. Explain how the gain or loss would be reported in the company’s income statement.

Q: Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse…

A: Answer to question a. Purchase cost of warehouse $65,000 Less: Depreciation claimed till year 0…

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Q: What amount should be capitalized as the cost of the new equipment?

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Q: Martinez Company owns equipment that cost $1,053,000 and has accumulated depreciation of $444,600.…

A: Computation of impairment loss:

Q: Yello Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased…

A: Depreciation costsTo calculate depreciation using the straight-line method, subtract the asset's…

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A: To determine the amount of accumulated depreciation on the asset at the time of its sale, we can use…

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A:

Q: ABC Ltd. Incurred the following costs related to the purchase of a machine: Invoice price Insurance…

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A: The exchange refers to the situation where old assets are exchanged with new assets. The new…

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Q: None

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A: Solution Dear student as per Q&A guideline we are required to answer the first question only .…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.