On January 1, Year 1, Bacco Company had a balance of $79,600 in its Delivery Equipment account. During Year 1, Bacco purchased delivery equipment that cost $27,500. The balance in the Delivery Equipment account on December 31, Year 1, was $80,396. The Year 1 income statement reported a gain from the sale of equipment for $3,400. On the date of sale, accumulated depreciation on the equipment sold amounted to $14,000. Required a. Determine the original cost of the equipment that was sold during Year 1. b. Determine the amount of cash flow from the sale of delivery equipment that should be shown in the investing activities section of the Year 1 statement of cash flows. Complete this question by entering your answers in the tabs below. Required A Required B Determine the original cost of the equipment that was sold during Year 1. Original cost of the equipment < Required A Required B

On January 1, Year 1, Bacco Company had a balance of $79,600 in its Delivery Equipment account. During Year 1, Bacco purchased delivery equipment that cost $27,500. The balance in the Delivery Equipment account on December 31, Year 1, was $80,396. The Year 1 income statement reported a gain from the sale of equipment for $3,400. On the date of sale, accumulated depreciation on the equipment sold amounted to $14,000. Required a. Determine the original cost of the equipment that was sold during Year 1. b. Determine the amount of cash flow from the sale of delivery equipment that should be shown in the investing activities section of the Year 1 statement of cash flows. Complete this question by entering your answers in the tabs below. Required A Required B Determine the original cost of the equipment that was sold during Year 1. Original cost of the equipment < Required A Required B

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, Year 1, a company purchased major pieces of manufacturing equipment for a total of $60 million. The company uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, Year 3, the book value of the equipment was $54 million and its tax basis was $44 million. At December 31, Year 4, the book value of the equipment was $52 million and its tax basis was $37 million. There were no other temporary differences and no permanent differences. Pretax accounting income for Year 4 was $45 million. Required: 1. Prepare the appropriate journal entry to record the company's Year 4 income taxes. Assume an income tax rate of 25%. 2. What is the company's Year 4 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record the company's Year 4 income taxes. Assume an income tax rate of 25%. Note: If no entry is required for a transaction/event,…
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