**Transaction Details for Sweets Inc.****Transaction 1: Sale of Old Delivery Truck**- **Date:** December 31, 2021- **Buyer:** Local farmer- **Sale Amount:** $5,000**Additional Information:**- The farmer paid the full amount in cash on December 31.- The delivery truck details on the books: - **Equipment - Delivery Truck:** $50,000 - **Accumulated Depreciation - Delivery Truck:** $50,000---**Transaction 2: Sale of Production Equipment**- **Date:** December 31, 2021- **Buyer:** Small candy manufacturer in Vermont- **Sale Amount:** $40,000**Additional Information:**- A note in payment was offered, agreeing to pay $50,000 to Sweets Inc. by June 30, 2022.- The production equipment details on the books: - **Equipment:** $200,000 - **Accumulated Depreciation - Equipment:** $185,000---**Instructor Note:**Prepare the necessary journal entries for each of the four transactions. The President is not an accountant, so ensure your memorandum clearly translates accounting details into broader business implications. **Case 3 – Memorandum to an Executive**Sweets Inc. made several capital purchases during the last month of the year. As part of the purchases, the company sold some existing fixed assets.Yesterday, as you were walking to the company cafeteria, you saw the President of Sweets Inc. While walking with the President, you mentioned that recent capital purchases would significantly impact the financial statements.Today, the President called you directly and asked you to write a memorandum explaining the impact of the capital purchases (and related sale of some existing fixed assets) on each of the following financial statements:- Income Statement- Balance Sheet- Statement of Cash Flows---**Summary of December Capital Transactions**- **On Dec. 1, 2021** Sweets Inc. purchased a new delivery truck for **$100,000.** *The following additional information was provided:* - The truck was paid for with cash. - The truck is expected to have a service life of **10 years.** - No salvage value is expected after the service life. - The company uses straight-line depreciation for their financial reporting.- **On Dec. 1, 2021** Sweets Inc. purchased equipment for a new production line at the Iowa Plant. The cost of the equipment was **$1,500,000.** *The following additional information was provided:* - The equipment was paid for with cash. - The equipment has an expected service life of **20 years.** - Salvage value at the end of the service life is estimated to be **$150,000.** - The company uses straight-line depreciation for their financial reporting. - The equipment was installed on December 15, 2021. The installation cost was **$50,000.** - Trial runs were also completed on December 15, 2021. The cost of the trial run was **$10,000.**

Purchase of Capital Assets It is important for the firm to purchases the capital assets which are…

On Dec. 31, 2021 Sweets Inc. sold an old delivery truck to a local farmer for $ 5,000 The following additional information was provided: The farmer paid Sweets Inc. the full amount in cash on December 31. The old delivery truck was on the books as follows: Equipment - Delivery Truck Accumulated Depreciation - Equipment- Delivery Truck $ 50,000 $50,000

On Dec. 31, 2021 Sweets Inc. sold an old delivery truck to a local farmer for $ 5,000 The following additional information was provided: The farmer paid Sweets Inc. the full amount in cash on December 31. The old delivery truck was on the books as follows: Equipment - Delivery Truck Accumulated Depreciation - Equipment- Delivery Truck $ 50,000 $50,000

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

Ronny’s Red Hat Company purchased machinery on August 3, Year 1 for $150,000. Ronny, the owner, estimated that the machinery would be sold for $30,000 in 10 years. If Ronny’s red Hat Company uses straight line depreciation, what is included in the entry to record the disposition of the asset on July 31, Year 3 if the machinery is sold for $120,000 cash? Multiple Choice Dr. Loss on disposition $6,000 Cr. Gain on disposition $4,000 Dr. loss on disposition $4,000 Cannot be determined with the data provided Dr. Loss on disposition $2,500
Man
Mr. X was an employee with the following information from his employment in 2020. Salaries and wages - $27,000 RRSP contribution in 2020 - $5,500 Membership dues paid by Mr. X - $500 Calculate Mr. X's the net employment income for 2020? Question 7 options: a) $21,500 b) $27,500 c) $21,000 d) $27,000
Copper Corporation sold machinery for $47,000 on December 31, 2021. The machinery had been purchased on January 2, 2018, for $60,000 and had an adjusted basis of $41,000 at the date of the sale. For 2021, what should Copper report? a.Ordinary income of $6,000. b.A § 1231 gain of $6,000. c.A § 1231 gain of $3,000 and $3,000 of ordinary income. d.A § 1231 gain of $6,000 and $3,000 of ordinary income.
Garcla Co. owns equlipment that cost $77,600, with accumulated depreclation of $41.200. Record the sale of the equipment under the following three separate cases assuming Garcla sells the equipment for (1) $47,600 cash. (2) $36,400 cash, and (3) $31.,300 cash. Vlew transaction Ilat Journal entry worksheet A Record the sale of equipment assuming Garcia sells the equipment for $47,600 cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry Vlew general journal
Brown Company paid cash to purchase the assets of Coffee Company on January 1, 2019. Information is as follows: Total cash paid $4,500,000 Assets acquired: Land $800,000 Building $700,000 Machinery $800,000 Patents $700,000 The building is depreciated using the double-declining balance method. Other information is: Salvage value $70,000 Estimated useful life in years 20 The machinery is depreciated using the units-of-production method. Other information is: Salvage value, percentage of cost 10% Estimated total production output in units 100,000 Actual production in units was as follows: 2019: 20,000 2020: 20,000 2021: 30,000 The patents are amortized on a straight-line basis. They have no salvage value. Estimated useful life of patents in years 40 On December 31, 2020, the value of the patents was estimated to be $100,000 Where applicable, the company uses the ½ year rule to calculate depreciation and amortization expense in the years of acquisition and disposal. Its fiscal year-end is…
K- Belvidere Furniture purchased land, paying $95,000 cash and signing a $280,000 note payable. In addition, Belvidere paid delinquent property tax of $5,000, title insurance costing $1,500, and $8,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $51,000 for a fence around the property, $13,000 for a sign near the entrance, and $3,000 for special lighting of the grounds. Read the requirements. Requirement 1. Determine the cost of the land, land improvements, and building. The cost of the land is $ 389,500 The total cost of the land improvements is Requirements 1. Determine the cost of the land, land improvements, and building. 2. Which of these assets will Belvidere depreciate? Print Done - X
Following are descriptions of land purchases in four separate cases. Requireda. Determine the cost used for recording the land acquired in each case.b. Record the journal entry for each case on the date of the land’s acquisition. Note: Round your answers to the nearest whole dollar. Case One 1. At the midpoint of the current year, a $32,000 check is given for land, and the buyer assumes the liability for unpaid taxes in arrears of $800 at the end of last year and those assessed for the current year of $720. a. Determine the cost used for recording the land acquired.Cost of land $Answer b. Record the journal entry on the date of the Account NameDr.Cr. Answer Answer Answer To record land acquisition.
Andy purchased a new desk for $750 on May 1, 2021. He immediately placed it into service for his accounting business. He will depreciate it using the 200% declining balance method and the half-year convention. How much is his 2021 depreciation deduction? A.$75 B.$107 C.$150 D.$750
Discuss the appropriate accounting treatment for the following intangible assets on 30 June2022. No entries required. a)Apublishing company purchased the magazine title"Potato Farmer" in 2019 for $2.5 million. An additional $200.000 was spent in 2020 to market the publishing title.On 30 June 2022 the publishing company believes the publishing title can be sold for $20 million. b) A company purchased the music rights to all the works of the famous band The lnsects in2018 for $15,000,000.The rights provided the company with the ability to use the music rights forever. On 30 June 2022 following a scandal involving one of the band members the frm estimates the likely fair value of the music rights is $5,000,000. c) On 30 June 2022 a hair loss treatment company acquired the results of research conducted into possible cures for male baldness from the Western Southern University for $6,000,000. The company intends to progress the most promising parts of the research in 2023 with additional…
On June 1, 2021, Nico places in service a new automobile that cost $40,000. The car is used 60% for business and 40% for personal use. (Assume this percentage is maintained for the life of the car.) Nico does not take additional first-year depreciation. Determine the cost recovery deduction for 2021. O a. $4,800 O b. $1,896 Oc. $1,776 Od. $6,000
please show work how its solved thanks.