On January 1, Year 2 Boothe Company paid $12,000 cash to extend the useful life of a machine. Which of the following statements is true regarding the- financial statement effects of this expenditure? Multiple Choice Retained earnings Increases Book value of machine increases Retained earnings decreases Book value of machine decreases

On January 1, Year 2 Boothe Company paid $12,000 cash to extend the useful life of a machine. Which of the following statements is true regarding the- financial statement effects of this expenditure? Multiple Choice Retained earnings Increases Book value of machine increases Retained earnings decreases Book value of machine decreases

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

Nn.21. Subject :- Account
For all questions work to 1 decimal place and assume VAT at 19%. You must justify each answer.1.- Why does a company choose to have bad debts? Explain with a numerical example. 2.- In depreciation by use (per hour), if a Fixed Asset of $1,000 has accumulated depreciation of $600, residual value of $100 and during a period the machine is used for 400 hours when its initial useful life was 40,000 hours, what depreciation should be recognised? 3.- In depreciation by use (per hour), if a fixed asset of $1,000 has accumulated depreciation of $600, residual value of $100 and during a period of time the machine is used for 400 hours when its initial useful life was 40,000 hours and at the beginning of that period there is an improvement of $200, what depreciation should be recognised? 4.- Make the entry for the recognition of the write-off of a customer to whom you had invoiced $1,000 plus VAT if the company had an Allowance for Impairment of Accounts Receivable of $600.5.- Does the Profit…
The following information is available for Reynolds Corporation: Retained Earnings, December 31, 2020 $1,500,000 Profit for the year ended December 31, 2021 250,000 The company accountant, in preparing financial statements for the year ending December 31, 2021, has discovered the following information:The company's previous bookkeeper, who has been fired, had recorded depreciation expense on a machine in 2019 and 2020 using the double diminishing-balance method of depreciation. The bookkeeper neglected to use the straight-line method of depreciation which is the company's policy. The cumulative effect of the error on prior years was $9,000. Depreciation was calculated by the straight-line method in 2021. Reynolds' average tax rate is 22%. During 2021, Reynolds declared and paid cash dividends of $80,000.Instructions a)Calculate the impact on retained earnings. b)Prepare the statement of retained earnings for 2021. Please don't provide solution in an image format thank you
Solve all questions otherwise leave
Basco Company sold office furniture for $40,000 cash. Th furniture cost $58,000 and had accumulated depreciation through the date of sale totaling $37,000. The company will recgonize. A. a loss of $19,000. B. a gain of $19,000. C. a gain of $21,000. D. a loss of $21,000. thanks for appreciated aittae ijteiyje
Ripley corporarion's accumulated depreciation - equipment account increased by 15325 while 3800 of patent amortization was recognized bewtween balance sheet dates. There were no purchases of sales of depreciation or intangible assets during the year. In addition the income statement showed a gain of 22420 from the salem of investments. Reconcile a net income of 286900 to net cash flow from operetatimg activities
Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) FORTEN COMPANY Income Statement For Current Year Ended December 31 Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, $5 par value FORTEN COMPANY Comparative Balance Sheets December 31 $ 132,400 20,750 Paid-in capital in excess of par, common stock…