of $8,000 were incurred. The machine has an estimated useful life of 10 years and salvage value of $10,000. What should the company record as depreciation expense for the first year under the straight line method?
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On January 1, 2020, ABC Co. entered into a contract to acquire a new
machine for its factory. The machine, which had a cash price of $300,000,
was paid for as follows: Down payment $30,000; Note payable in 10 equal
monthly installments $240,000; 1,000 shares of Banana Co. ordinary
shares with an agreed value of $50 per share: $50,000 Total $320,000.
Prior to the machine's use, installation costs of $8,000 were incurred. The
machine has an estimated useful life of 10 years and salvage value of
$10,000. What should the company record as
the first year under the
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- 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,…On January 1, 2024, Nath-Langstrom Services, Incorporated, a computer software training firm, leased several computers under a two-year operating lease agreement from Computer World Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $95, 000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare appropriate journal entries recorded by Nath - Langstrom Services for the first year of the lease. Prepare appropriate journal entries recorded by Computer World Leasing for the first year of the lease.In January 2019, Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of $280,000, was paid for as follows: Down payment $130,000 Note payable in 4 equal annual payments starting in January 2020 $120,000 500 shares of Cordova preferred stock with a mutually agreed value of $100 per share (par value $100) $50,000 Fair rate of interest on the non-interest-bearing note 10% GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6
- American Food Services, Incorporated, acquired a packaging machine from Barton and Barton Corporation. . Barton and Barton completed construction of the machine on January 1, 2024. In payment for the $4.9 million machine, American Food Services Issued a four-year Installment note to be paid in four equal payments at the end of each year. • The payments Include Interest at the rate of 12%. Required: 1. Prepare the journal entry for American Food Services purchase of the machine on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2024. 4. Prepare the Journal entry for the third Installment payment on December 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) · Complete this question by entering your answers in the tabs below. Req 2 Req 1 3 and 4 Prepare an amortization schedule…Janrel Company entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: down payment, P400,000, note payable in 3 equal annual installments, P1,200,000, 20,000 ordinary shares with a par value of P25,000 and fair value of P40 per share, P800,00O. Prior to the machine's use, installation cost of P50,000 was incurred. The machine has an estimated residual value of P100,000. What is the initial cost of the machine?On January 1, 2024, Nath-Langstrom Services, Incorporated, a computer software training firm, leased several computers under a two- year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. . The contract calls for four rent payments of $18,500 each, payable semiannually on June 30 and December 31 each year. • The computers were acquired by ComputerWorld at a cost of $107,000 and were expected to have a useful life of five years with no residual value. . Both firms record amortization and depreciation semiannually. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease. 2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.
- Holly Springs, Incorporated contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Holly Springs paid for the lathe by issuing a $330,000 note due in three years. Interest, specified at 2%, was 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 for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry on January 1, 2024, for Holly Springs' purchase of 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. Complete this question by…On May 1, 2018, Meta Computer, Inc., enters into a contract to sell 5,000 units of Comfort Office Keyboard toone of its clients, Bionics, Inc., at a fixed price of $95,000, to be settled by a cash payment on May 1. Deliveryis scheduled for June 1, 2018. As part of the contract, the seller offers a 25% discount coupon to Bionics for anypurchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same timeperiod, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probabilitythat Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $20,000 of purchases.The stand-alone selling price for the Comfort Office Keyboard is $19.60 per unit.Required:1. How many performance obligations are in this contract?2. Prepare the journal entry that Meta would record on May 1, 2018.3. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to…On January 1, 2024, Nath-Langstrom Services, Incorporated, a computer software training firm, leased several computers under a two- year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $20,000 each, payable semiannually on June 30 and December 31 each year. • The computers were acquired by ComputerWorld at a cost of $110,000 and were expected to have a useful life of eight years with no residual value. . Both firms record amortization and depreciation semiannually. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) • Required: 1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease. 2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease. Complete this question by entering your…
- Sequential Method Belami Company manufactures shampoo and hair conditioner, with each product manufactured in separate departments. Three support departmer departments are as follows: Overhead Square feet Machine hours Purchase orders Required: Allocation ratios: Square feet Machine hours Purchase orders Cost allocation: Direct costs General Factory Purchasing Power Support Departments Total Power Check My Work $94,000 3,000 20 General Factory $430,000 The company does not break overhead into fixed and variable components. The bases for allocation are power-machine hours; general factory-sc The company has decided to use the sequential method of allocation instead of the direct method. The support departments are ranked in order of 1. Allocate the overhead costs to the producing departments using the sequential method. Carry out allocation ratios to four decimal places. Use th zero, enter "0". Power 0.1250 ✔ Power 1,403 0 0.1000 - 40 danasto Producing Departments Purchasing Shampoo…On January 1, 2021, Glanville Company sold goods to Otter Corporation. Otter signed an installment note requiring payment of $21,500 annually for five years. The first payment was made on January 1, 2021. The prevailing rate of interest for this type of note at date of issuance was 10%. Glanville should record sales revenue in January 2021 of: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $107,500 $81,502 $89,652 None of these answer choices are correct.Holly Springs, Incorporated contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Holly Springs paid for the lathe by issuing a $300,000 note due in three years. Interest, specified at 2%, was 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 for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required:1.Prepare the journal entry on January 1, 2024, for Holly Springs’ purchase of 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.
