On January 1", 2019, ABC Inc. purchased a copper mine for $400,000. The company is required by provincial law to restore the land on which the mine is located to its initial condition at the end of the mine's ten year useful life. Restoration costs are estimated to be $35,000. ABC is subject to an interest rate of 5%. ABC Inc uses straight line deprecation and follows IFRS. Required Prepare the journal entries required on January 1st and December 31st, 2019 and the journal entry for December 31, 2020. Round all entries to the nearest dollar.

On January 1", 2019, ABC Inc. purchased a copper mine for $400,000. The company is required by provincial law to restore the land on which the mine is located to its initial condition at the end of the mine's ten year useful life. Restoration costs are estimated to be $35,000. ABC is subject to an interest rate of 5%. ABC Inc uses straight line deprecation and follows IFRS. Required Prepare the journal entries required on January 1st and December 31st, 2019 and the journal entry for December 31, 2020. Round all entries to the nearest dollar.

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

On January 1, 2023, Blossom Ltd. acquires a building at a cost of $200,000. The building is expected to have a 20-year life and no residual value. The asset is accounted for under the revaluation model, using the asset adjustment method. Revaluations are carried out every three years. On December 31, 2025, the fair value of the building is appraised at $175,000, and on December 31, 2028, its fair value is $120,000. Blossom applies IFRS. Prepare the journal entries required on December 31, 2025, and the journal entry required on December 31, 2028, to revalue the building, if Blossom uses the proportionate method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 5,275.) Date ec. 31, 2025 c. 31, 2028 V Account…
Corn Snake Company purchased patent on January 1, 2019, for P3,570,000. The patent was being amortized over its remaining legal life of 15 years. During 2022, Corn Snake determined that the economic benefits of the patent would not last longer than ten years form the date of acquisition. What amount should be reported in the statement of financial position as patent, net of accumulated amortization, at December 31, 2022? A. 2,618,000 B. 2,448,000 ]C. 2,520,000 D. 2,142,000
Information concerning Blue Corporation's intangible assets is as follows. On January 1, 2025, Blue signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2026. The agreement provides that the down payment is not refundable and no future services are required f the franchisor. The present value at January 1, 2025, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $57,100. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Blue's revenue from the franchise for 2025 was $870,000. Blue estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) Blue incurred…
Conrad Inc. purchased a patent for $2,900,000 for "a specialty line of patented switch plate covers and outlet plate covers specifically designed to light up automatically when the power fails." Assume the switch plate patent was purchased January 1, 2020, and it is being depreciated over a period of ten years. Assume that Conrad Inc. does not use an accumulated amortization account but instead charges amortization directly against the intangible asset account. Required: 1. This part of the question is not part of your Connect assignment. 2. Prepare the journal entries to record the purchase and amortization of the switch plate patent in 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 2 Event No 1 a b Event Patent a Answer is complete but not entirely correct. Bad debt expense Amortization expense Patent Impairment loss Patent General Journal Debit 29,000,000 X 3. After a year of unsuccessful attempts to…
On January 1, 2021, Raquel Company purchased a machine for 3,000,000. The entity received a government grant of 500,000 in respect of this asset. The policy is to depreciate the asset over 5 years on a straight line basis and to treat the grant as deferred income. On January 1, 2023, the grant became fully repayable because of non compliance with conditions. Required: Prepare journal entries for 2021, 2022 and 2023.
Beaver Construction purchases new equipment for $50,400 cash on April 1, 2024. At the time of purchase, the equipment is expected to be used in operations for seven years (84 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 84 months ($600/month). Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2024 is $0). Complete this question by entering your answers in the tabs below. Required 1 and 2 Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Required 3 View transaction list Journal entry worksheet
Can you please help me with this? DEE Inc. purchased an equipment on March 31, 2019. The selling price of the asset is equal to its fair value at $1,400,000. The entity acquired the equipment by issuing 1,000 $1,000 8% bonds, currently quoted at 103. Provided that the entity is using the SYD method of depreciation, and the equipment's useful life is five (5) years with a 10% residual value based on its cost, what is the carrying value of the equipment as of December 31, 2020?
Marigold Company purchases a patent for $504,000 on January 2, 2022. Its estimated useful life is 18 years. Prepare the journal entry to record amortization expense for the first year.
Manila Company is engaged in leasing heavy equipment. On December 1, 2020, the entity bought a second hand heavy equipment for P375,000. In December 2020, the entity incurred P75,000 for a major overhaul to put the equipment in good running condition. The equipment is available for the intended use on December 31, 2020. The equipment has an estimated useful life of 5 years. Depreciation is on a straight line basis. On April 1, 2021, Manila Company leased the equipment to Makati Company for 2 years up to March 31, 2023. The lease fee is P15,000 per month. Mkati Company paid P180,000 on April 1, 2021, the lease fee for one year. During 2021, Manila Company spent P7,000 for minor repairs and P3,000 for transporation of the equipment to Makati Company. Required: Prepare journal entries on the books of the lessor for 2020 and 2021.
Conrad Inc. purchased a patent for $1,000,000 for a specialty line of patented switch plate covers and outlet plate covers specifically designed to light up automatically when the power fails. Assume the switch plate patent was purchased January 1, 2020, and it is being depreciated over a period of ten years. Assume that Conrad Inc. does not use an accumulated amortization account but instead charges amortization directly against the intangible asset account. Required: 1. This part of the question is not part of your Connect assignment. 2. Prepare the journal entries to record the purchase and amortization of the switch plate patent in 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the purchase of patent. Note: Enter debits before credits. Event a General Journal Debit Credit View general journal Record entry Clear entry
On January 1, 2020, Brown Mining Enterprises purchased an existing coalmine. Brown expects to operate the mine for four years (i.e., until the end of 2023), after which it is legally required to dismantle the coalmine. Brown estimates that it will have to pay $500,000 to dismantle the mine and accomplish the other required asset retirement activities such as filling and restoring land etc. at the end of the mine’s life. The applicable general interest rate for Brown is 10% (considering its credit standing and the interest rates on its other borrowings). Prepare the journal entry to record the asset retirement obligation on January 1, 2020 and prepare the journal entries for depreciation and interest expense on december 31, 2020 2. Prepare journal entries for depreciation and interest expense on December 31, 2020.
On July 1, 2021, Catlyn Company sold a parcel of undeveloped land to a construction company for $540,000. The book value of the land on Catlyn's books was $140,000. Terms of the sale required a down payment of 10% of the selling price and 9 annual payments of 10% of the selling price plus interest at an appropriate interest rate due on each July 1 beginning in 2022. Catlyn has no significant obligations to perform services after the sale. Calculate the balance in the deferred gross profit account in 2022 applying the installment sales method. (Please round answer to the nearest dollar, i.e. $86,666.67 should be interested as 86667).