Help me tutor to solve questions. Give correct general accounting answer On July 1, 2013, X Company purchased a machine by payinga $20,000 down payment and signing a noninterest-bearingnote for $360,000, calling for payments of $6,000 per monthfor the next 5 years. X also paid an additional $10,000 fordelivery and installation. The equipment could have beenpurchased for $310,000 on the date of acquisition. Theequipment has a 10-year useful life with no salvage value andwill be depreciated on a straight-line basis. What will be theamount of depreciation recognized in 2014?

Step 1: Definition of Straight-Line DepreciationStraight-line depreciation is a method used to…

Answered: On July 1, 2013, X Company purchased a…

Principles of Accounting Volume 1

19th Edition

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Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6EA: Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of...

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Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of twenty years, but Calico only expects to be able to sell the drug for fifteen years. Calculate the amortization expense and record the journal for the first-year expense.
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.
ACY Limited (“ACY”) purchased a specialized machine for its business use for a total price of $3,000,000, paid in cash, on 1 January 2018. The total price included installation fee of $50,000, which enabled the machine to be immediately available for ACY’s use on 1 January 2018. This is estimated that the machine has a useful life of 10 years with a residual value up to $200,000. Double-declining-balance depreciation method is adopted. On 1 January 2018, to help finance the acquisition of this machine, ACY issued a 5-year zero-interest-bearing note, with a face value of $1,000,000, due on 31 December 2022. The market rate is 8% for notes with similar risks.QuestionAs at 31 October 2018, which of below correctly presents the zero-interest-bearing note on the Statement of Financial Position of ACY?Select one: A.Non-current liability: $725,955 B.Non-current liability: $1,000,000 C.Non-current liability: $680,583 D.Non-current liability: $58,076; AND Current-liability: $667,879
Taylor Company purchased a machine for $9,800 on January 1, 2016. The machine has beendepreciated using the straight-line method assuming it has a five-year life with a $1,400residual value. Taylor sold the machine on January 1, 2018, for $7,600.Q7-61. What is the book value of the machine on December 31, 2017?a. $2,100b. $6,440c. $8,400d. $9,800
On January 1, 20X1, Beard Company purchased a machine for $620,000. The machine is expected to have a 10-year life, with no salvage value, and will be depreciated by the straight-line method. On January 1, 20X1, it leased the machine to Child Company for a three-year period at an annual rental of $128,000 to be paid at the end of each year. Beard could have sold the machine for $817,298 instead of leasing it. Child does not know the implicit rate in the lease, but it has an incremental rate of 9%. Child Company has a December 31 reporting year. Required: Why is this an operating lease for Child Company? What are the amounts of the right-of-use asset and lease liability that Child Company should report on its balance sheet at December 31, 20X1? How much lease expense should Child Company recognize in 20X1?
On January 1, 20X1, Beard Company purchased a machine for $620,000. The machine is expected to have a 10-year life, with no salvage value, and will be depreciated by the straight-line method. On January 1, 20X1, it leased the machine to Child Company for a three-year period at an annual rental of $128,000 to be paid at the end of each year. Beard could have sold the machine for $817,298 instead of leasing it. Child does not know the implicit rate in the lease, but it has an incremental rate of 9%. Child Company has a December 31 reporting year. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest whole dollar amount.) Required: Why is this an operating lease for Child Company? What are the amounts of the right-of-use asset and lease liability that Child Company should report on its balance sheet at December 31, 20X1? How much lease expense should Child Company…
During the current year, Adrienne Company purchased a second hand machine at a price of P5,000,000. A cash payment of P1,000,000 was made and a two-year, noninterest bearing note was issued for the balance of P4,000,000. Recent transactions involving similar machine indicate that the used machine has a second hand market value of P4,500,000. A new machine would cost of P6,500,000. The following costs were incurred during the year. Cost of removing old machine that is replaced Cash proceeds from the sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdown 350,000 100,000 220,000 80,000 Cost of installation 180,000 Cost of testing machine prior to use Cost of hauling the machine from vendor to entity premises Cost of repairing damage to machine caused when the machine was dropped during installation 150,000 40,000 50,000 Repairs incurred during the first year of operation Safety device added to the machine…
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On January 1, Year 1, Lowing Company acquired a patent from Generics Research Corporation for $3 million. The legal life of the patent is 20 years, but Lowing expects to use it for 5 years. Pawson Company has committed to purchase the patent from Lowing for $500,000 at the end of that 5-year period. Lowing uses the straight-line method to amortize intangible assets with finite useful lives. What is the amount of amortization expense each year?
On January 1, 2014, Barbed Company purchased an equipment for P900,000, with an estimated useful life of 8 years. Straight-line method of depreciation is to be used with no salvage value. On January 1, 2017, the equipment was tested for impairment. The estimated selling price of the equipment is P550,000 and the estimated cost to sell is P30,000. The asset is expected to provide annual net cash inflows of P145,000 during the remaining useful life of the equipment and estimated a residual value of P35,000 at the end of its useful life. The appropriate pre-tax discount rate that reflects current market assessments of the time value of money is 12%. 26) How much is the recoverable value of the equipment on January 1, 2017? A 520,000 C. 550,000 . B. 542,570 D. 562,500 27) How much is the impairment loss to be recognized on January 1, 2017? A. 12,500 C. 19,930 B. 42,500 D. 0 28) How much is the depreciation expense for the year 2017? A. 108,514 C. 103,000 B. 101,514 D. 112,500

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