Can you please solve this general accounting question? 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: Define Non-Interest-Bearing NotesWhen a company issues a non-interest-bearing note to pay…

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

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

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.
Oscar Company acquired a patent on a manufacturing process on January 1, 2015 for $5,100,000. It was expected to have a 12 year life and no residual value. Oscar uses straight-line amortization for patents. On December 31, 2016, the expected future cash flows from the patent are $387,500 per year for the next ten years. The present value of these cash flows, discounted at Oscar’s market interest rate, is $3,050,000. At what amount should the patent be carried on the December 31, 2016 balance sheet?
Coronado Company purchased Machine #201 on May 1, 2025. The following information relating to Machine #201 was gathered at the end of May. Price Credit terms Freight-in Preparation and installation costs Labor costs during regular production operations (a) It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Coronado intends to use the machine for only 8 years, however, after which it expects to be able to sell it for $1,860. The invoice for Machine #201 was paid May 5, 2025. Coronado uses the calendar year as the basis for the preparation of financial statements. 1. Compute the depreciation expense for the years indicated using the following methods. Straight-line method for 2025 2. Sum-of-the-years'-digits method for 2026 3. $105,400 2/10, n/30 $992 $4,712 $13,020 Double-declining-balance method for 2025 $ $ $ Depreciation Expense
CEE Corporation purchased a machine on January 1, 2016 by instalment, initially paying $1.000.000, and a payment of $500.000 every December 31 is required for four (4) years. The selling price of the machine, if paid on cash basis, is $2,500,000. The residual value of the machine after its 4-year useful life is $200.000. The company used the double declining balance method in depreciating the machine. How much is the cost of the machine upon acquisition? A. $3,000,000 B. $2,800,000 C. $2,500,000 D. $2,300,000 Can you please answer this proven by a solution?
Fenner Co. purchased a lathe machine for $72,000 on January 5, 2013. This (old) lathe had an estimated life of ten years and salvage value of $12,000. On April 3, 2020, the old lathe was exchanged for a similar lathe (in an exchange with no commercial substance) with a list price of $45,000. Fenner also paid $9,000 cash. The old lathe had a fair market value of $34,000 on April 3, 2020. Assume that the last fiscal period ended on December 31, 2019, and that straight-line depreciation is used on the basis of nearest full month. Compute the book/carrying value of the old lathe on April 3, 2020. Compute the gain (loss) on disposal booked by Fenner Co. on April 3, 2020. Prepare the journal entry made by Fenner Co. on April 3, 2020, to record the exchange of assets. Now assume that the fair market value of the old lathe on April 3, 2020, is $26,000 instead. Compute the gain (loss) on disposal booked by Fenner Co. on April 3, 2020.
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
CEE Corporation purchased a machine on January 1, 2016 by instalment, initially paying $1,000,000, and a payment of $500,000 every December 31 is required for four (4) years. The selling price of the machine, if paid on cash basis. is $2,500,000. The residual value of the machine after its 4-year useful life is $200,000. The company used the double declining balance method in depreciating the machine. How much is the depreciation expense for 2019? Can you please answer this?
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 August 1, 2014, Bright Company purchased a new machine on a deferred payment basis. A down payment of P100,000 was made and 4 monthly installments of P250,000 each are to be made beginning on August 1, 2014. The terms of the agreement is not considered normal. The cash equivalent price of the machine was P950,000. Bright incurred and paid installation costs amounting to P30,000. How much should be capitalized as cost of the machine.

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