ood Inc. is a not-for-profit organization that was formed on January 1, 2020. Do-Good has a December 31 year end. It has an accounting policy of capitalizing and amortizing its capital assets. On April 1, 2020, Do-Good purchased equipment costing $8,000. The equipment is estimated to have a useful life of 4 years, with no residual value at that time. This transaction was the only transaction that took place to date. The equipment was purchased from a restricted fund contribution of $8,400. In which fund would the purchase and amortization of the asset be recorded? The General Fund The Capital Fund The Operating Fund The Endowment Fund

ood Inc. is a not-for-profit organization that was formed on January 1, 2020. Do-Good has a December 31 year end. It has an accounting policy of capitalizing and amortizing its capital assets. On April 1, 2020, Do-Good purchased equipment costing $8,000. The equipment is estimated to have a useful life of 4 years, with no residual value at that time. This transaction was the only transaction that took place to date. The equipment was purchased from a restricted fund contribution of $8,400. In which fund would the purchase and amortization of the asset be recorded? The General Fund The Capital Fund The Operating Fund The Endowment Fund

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

The Laura Company has the following errors on its books as of December 31, 2020. The books for 2020 have not yet been closed. a. In 2020, fully depreciated equipment (with no residual value) that originally cost $8,000 was sold for $700 as scrap. The company credited the $700 proceeds to Equipment. b. On January 1, 2019, the company recorded the purchase of equipment in exchange for a three-year, noninterest-bearing note payable in the amount of $10,000. Interest rates were then 8%, but no recognition was made of this fact. The present value of $1 at 8% for three periods is 0.7938. (Ignore depreciation.) Required: Prepare journal entries to correct these errors at December 31, 2020. Ignore income taxes.
Brix Co owns a building which it uses as its office, warehouse and garage. The land is carried as a separate non-current tangible asset in the statement of financial position. Brix Co has a policy of regularly revaluing its tangible non-current assets. The original cost of the building on 1 January 2006 was $2.1 million, and at that date it was estimated to have a useful economic life of 20 years, with no residual value. The company adopted the revaluation model of IAS 16 in 2012 and the building was valued at subsequent valuations as follows: 31 December 2012 $2.6 million 31 December 2015 $2.4million At each revaluation date the remaining useful life remains unchanged. Brix Co also owns a brand name, which it acquired 1 January 2014 for $1 million. The brand name is being amortised over 10 years and has a carrying amount at 31 December 2015 of $800,000. A brand specialist valued Miami's brand name at market value of $780,000 on the same date and Miami's chief accountant calculated…
Saint John Corporation prepares its financial statements according to IFRS. On June 30, 2016, the company purchased a franchise for $1,200,000. The franchise is expected to have a 10-year useful life with no residual value. Saint John uses the straight-line amortization method for all intangible assets. On December 31, 2016, the end of the company’s fiscal year, Saint John chooses to revalue the franchise. There is an active market for this particular franchise and its fair value on December 31, 2016, is $1,180,000. Required: 1. Calculate amortization for 2016. 2. Prepare the journal entry to record the revaluation of the patent. 3. Calculate amortization for 2017.
On January 3, 2018, Tracer Incorporated purchased a patent for $450,000 to manufacture a new type of chair. The patent has a remaining legal life of twelve years. Tracer plans to manufacture the chair for eight years and then sell the patent for $50,000. The company amortizes intangible assets using the straight-line method. On December 29, 2020, Tracer decides to sell the patent for $325,000. Assuming the company has a December 31 year-end, what is the gain or loss recorded on the sale of the patent?
On December 31, 2019, Hairy Inc. Sold computer equipment to Barber Co and immediately leased it back for 10 years. The sales price of the equipment was P560, 000, its carrying amount is P400, 000, and its estimated economic life is 12 years. Determine the amount of deferred revenue to be reported from the sale of the computer equipment on December 31, 2012.
Marin Inc. purchased computer equipment on March1,2020, for $68000. The computer equipment has a useful life of five year and a residual value of $800. Marin uses a double declining balance method of depreciation for this type of capital. For tax purpose, the computer is assigned to Class 10 with a 30% rate. prepare a schedule of CCA and undepreciated capital(UCC) for this asset covering 2020,2021,2022, assuming it is the only class 10 asset owned by Marin.
Brix Co owns a building which it uses as its office, warehouse and garage. The land is carried as a separate non-current tangible asset in the statement of financial position. Brix Co has a policy of regularly revaluing its tangible non-current assets. The original cost of the building on 1 January 2006 was $2.1 million, and at that date it was estimated to have a useful economic life of 20 years, with no residual value. The company adopted the revaluation model of IAS 16 in 2012 and the building was valued at subsequent valuations as follows: 31 December 2012 $2.6 million 31 December 2015 $2.4million At each revaluation date the remaining useful life remains unchanged. Brix Co also owns a brand name, which it acquired 1 January 2014 for $1 million. The brand name is being amortised over 10 years and has a carrying amount at 31 December 2015 of $800,000. A brand specialist valued Miami's brand name at market value of $780,000 on the same date and Miami's chief accountant calculated…
Su Ltd. acquired an excavator on January 1, 2020, for ¥10,000 (all amounts in thousands). This excavator represents the company’s only piece of equipment, and Su chooses revaluation accounting. This excavator is being depreciated on a straight-line basis over its 10-year useful life. There is no residual value at the end of the 10-year period. The appraised value of the excavator approximates the carrying value at December 31, 2020 and 2022. On December 31, 2021, the fair value is determined to be ¥8,800; on December 31, 2023, the fair value is determined to be ¥5,000. a. Show all journal entries for each year-end from 2020 through 2023. b. Su also owns some property and buildings for which revaluation accounting is not used. Briefly discuss why Su might not use revaluation accounting for these assets.
JJJ Company insured the life of its president for P2,000,000. The entity being the beneficiary of an ordinary life insurance policy. The annual premium is P80,000 and the policy is dated January 1, 2016. The cash surrender values are P15,000 on December 31, 2018 and P19,000 on December 31, 2019. The entity followed the calendar year as the fiscal period. The president died on October 1, 2019 and the policy is settled on December 31, 2019. What is the life insurance expense for 2019?
Corning Industries owns a patent for which it paid $77,000. At the end of the current year, accumulated amortization on the patent totaled $14,000. Due to adverse economic conditions, Corning’s management determined that it should assess whether an impairment loss should be recognized for the patent. The estimated undiscounted future cash flows to be provided by the patent total $45,000, and the patent's fair value is $30,000. (a) What is the amount of the impairment loss, if any, on the patent at the end of the current year? (b) What is the book value of the patent after any impairment loss is recorded?
Globe Inc. (a public corporation) had a Class 10 undepreciated capital cost (UCC) balance of $12,000 at the end of 2021. The only asset in the pool (a small pickup truck) was sold on December 20th of 2022 for $5,000. On the same day. Globe purchased a new truck for $8,000. How much CCA can Globe claim in 2022? (The maximum CCA is always claimed by Globe Inc.) Multiple Choice O $1,350 $3,600 $4,950
On January 1, Year 2, several supporters of the entity above spent their own money to construct a garage for its vehicles that is worth $70,000. It should last for 10 years and will have no salvage value although no time restriction was assumed. The entity increased its contributed support within the unrestricted net assets by $70,000 and increased its expenses within unrestricted net assets by $70,000.a. What was the correct amount of unrestricted net assets at the end of Year 2?b. What was the correct amount of total assets at the end of Year 2?c. What was the correct amount of expenses for Year 2?