2015 when it started its operations?? Silver Spoon, a fine-dining restaurant, began itsoperations in 2015. Its fixed assets had a bookvalue of $950,000 in 2016. The restaurant did notpurchase any fixed assets in 2016. The annualdepreciation expense on fixed assets was $80,000,and the accumulated depreciation account had abalance of $160,000 on December 31, 2016. Whatwas the original cost of fixed assets owned by therestaurant in 2015 when it started its operations?

To find the original cost of fixed assets owned by the restaurant in 2015, we use the relationship:…

Answered: Silver Spoon, a fine-dining restaurant,…

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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Swifty Corporation owns equipment that cost $70,800 when purchased on April 1, 2013. Depreciation has been recorded at a rate of $11,800 per year, resulting in a balance in accumulated depreciation of $56,050 at December 31, 2017. The equipment is sold on July 1, 2018, for $14,160. Prepare journal entries to (a) update depreciation for 2018 and (b) record the sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (a) (b)
Marigold Corporation owns equipment that cost $52,800 when purchased on April 1, 2013. Depreciation has been recorded at a rate of $8,800 per year, resulting in a balance in accumulated depreciation of $41,800 at December 31, 2017. The equipment is sold on July 1, 2018, for $10,560.Prepare journal entries to (a) update depreciation for 2018 and (b) record the sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (a) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (b) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title
Mandall Company constructed a warehouse for $280,000 on January 2, 2017. Mandall estimates that the warehouse has a useful life of 20 years and no residual value. Construction records indicate that $40,000 of the cost of the warehouse relates to its heating, ventilation, and air conditioning (HVAC) system, which has an estimated useful life of only 10 years. What is the first year of depreciation expense using straightline component depreciation under IFRS?(a) $28,000. (c) $16,000.(b) $14,000. (d) $4,000
Mondale Winery depreciates its equipment using the group method. The cost of equipment purchased in 2016 totaled $425,000. The estimated residual value of the equipment was $40,000 and the group depreciation rate was determined to be 18%. What is the annual depreciation for the group? If equipment that cost $42,000 is sold in 2017 for $35,000, what amount of gain or loss will the company recognize for the sale?
Jersey Corporation, which has a calendar year accounting period, purchased a machine for $400,000 on April 1, 2016. At that time Jersey expected to use the machine for nine years and then sell it for $4,000. The machine was sold for $22,000 on Sept. 30, 2021. Assuming straight-line depreciation, calculate the gain(/(loss) at the sale of the machine.
Irwin, Inc., constructed a machine at a total cost of $35 million. Construction was completed at the end of 2014and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At thebeginning of 2018, Irwin decided to change to the straight-line method. Ignoring income taxes, what journalentry(s) should Irwin record relating to the machine for 2018?
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2015 for $2,560,000. Its useful life was estimated to be six years,with a $160,000 residual value. At the beginning of 2018, Clinton decides to change to the straight-line method.The effect of this change on depreciation for each year is as follows:($ in thousands)Year Straight Line Declining Balance Difference2015 $ 400 $ 853 $4532016 400 569 1692017 400 379 (21)$1,200 $1,801 $601Required:1. Briefly describe the way Clinton should report this accounting change in the 2016–2018 comparative financial statements.2. Prepare any 2018 journal entry related to the change.
On August 1, 2015, Toy inc. purchosed a new piece of equipment that cost$25000. The estimoted useful ife is five years and the estimated residual value is 52,500 . During the five years of useful life the equpment is expected to produce 10.000 units. If the company uses the double declining bolance method of depreciation, what is the depreciation expense for the yeat ended December 31 , 2016 ? Mutiple Croice $15,000 $5,400 $8,333 $6,000 None of the other atfenatives aro correct
Equipment was purchased on January 2, 2017, for $24,000,but no portion of the cost has been charged to depreciation.The corporation wishes to use the straight-linemethod for these assets, which have been estimated tohave a life of 10 years and no salvage value. What effectdoes this error have on net income in 2017? What entry isnecessary to correct for this error, assuming that the booksare not closed for 2017?
The following information applies to the questions displayed below.] On April 1, 2016, Cyclone's Backhoe Co. purchases a trencher for $312,000. The machine is expected to last five years and have a salvage value of $56,000. Compute depreciation expense for both years ending December 2016 and 2017 assuming the company uses the double-declining-balance method. (Enter all amounts positive values.)
Burg Company’s beginning balance in its Property, Plant, and Equipment (PP&E) account was $700,000 on January 1, 2017. The PP&E account had an ending balance of $1,000,000 on December 31, 2017. Accumulated Depreciation on the equipment had a beginning balance of $300,000 and an ending balance of $420,000. Depreciation expense during 2017 was $200,000. Strasburg sold PP&E with a net value of $50,000 during 2017, and reported a gain on the sale of $14,000. How much cash did Strasburg receive from the sale of PP&E? How much cash did Strasburg pay to purchase new PP&E?
On December 31, 2017, Swifty Inc. has a machine with a book value of $1,015,200. The original cost and related accumulated depreciation at this date are as follows. Machine $1,404,000 Less: Accumulated depreciation 388,800 Book value $1,015,200 Depreciation is computed at $64,800 per year on a straight-line basis.Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. A fire completely destroys the machine on August 31, 2018. An insurance settlement of $464,400 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for…

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