Answered: suming the asse

Business

Accounting

suming the asse

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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A company purchased $206,000 of fixed assets that are classified as five-year MACRS property. The MACRS rates are 2, 32, 192, 1152 1152, and .0576 for Years 1 to 6, respectively. What will the accumulated depreciation be at the end of Year 4 if the tax rate is 24 percent and no bonus depreciation is taken? Instruction: Enter your response rounded to two decimal places.
An equipment asset was purchased on 1 January for $30,000 with an estimated residual value of $6,000 at the end of its useful life. For each financial year (ending on 31 December), the depreciation expense is $3,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the latest financial year is $15,000. The remaining useful life of the equipment asset is: Select the one correct answer: O 10 years. 3 years. O 5 years. 8 years.
Sunland Corporation owns machinery that cost $25,200 when purchased on July 1, 2022. Depreciation has been recorded at a rate of $3,024 per year, resulting in a balance in accumulated depreciation of $10,584 at December 31, 2025. The machinery is sold on September 1, 2026, for $13,230. Prepare journal entries to (a) update depreciation for 2026 and (b) record the sale.
A fixed asset has a useful life of 5 years is purchased on the first of January of a certain. The purchasing price of the asset is $3,017.15, and its residual value is expected to be $759.01.. Based on this information, the depreciation for year 1 will be equal to (in three digits):
On January 2, Bering Company disposes of a machine costing $47,800 with accumulated depreciation of $25,749. Prepare the entries to record the disposal under each separate situation. The machine is sold for $18,494 cash. The machine is traded in for a new machine having a $64,300 cash price. A $22,762 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. The machine is traded in for a new machine having a $64,300 cash price. A $17,072 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
At 1 January 20X0 Casey had property, plant and equipment with a carrying amount of $180,000. In the year ended 31 December 20X0 Casey disposed of assets with a carrying amount of $60,000 for $50,000. Casey revalued a building from $75,000 to $100,000 and charged depreciation for the year of $20,000. At the end of the year, the carrying amount of property, plant and equipment was $250,000. How much will be reported in the statement of cash flows for the year ended 31 December 20X0 under the heading 'cash flows from investing activities'? A $75,000 outflow B $125,000 outflow C $135,000 outflow D$50,000 inflow
Sheridan Company owns equipment that cost $68,520 when purchased on January 1, 2019. It has been depreciated using the straight- line method based on estimated salvage value of $6,000 and an estimated useful life of 5 years. Prepare Sheridan Company's journal entries to record the sale of the equipment in these four independent situations. (List all debit entries before credit entries. 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 O for the amounts.) (a) Sold for $32,512 on January 1, 2022. (b) Sold for $32,512 on May 1, 2022. (c) Sold for $10,100 on January 1, 2022. (d) Sold for $10,100 on October 1, 2022. No. Account Titles and Explanation Debit Credit (a) (b) (To record depreciation) (To record sale of equipment) (c) (d) (To record depreciation) (To record sale of equipment)
An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record: Multiple Choice O O O Neither a gain or loss is recognized on this type of transaction. A gain on sale of $2,000. A loss on sale of $1,000. A gain on sale of $1,000. A loss on sale of $2,000.
Marigold Company owns equipment that cost $79,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $7,900 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Marigold Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (a) (b) (c) (d) (e) (A) SR. Account Titles and Explanation (a) (b) Sold for $45,000 on January 1, 2022. Sold for $45,000 on April 1, 2022. Sold for $17,000 on January 1, 2022. Sold for $17,000 on September 1, 2022 Repeat (a), assuming Marigold uses double-declining balance…
An asset was purchased for $101,000 on January 1, Year 1, and originally estimated to have a useful life of 12 years with a residual value of $14,000. At the beginning of the third year, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,200. Compute the third-year depreciation expense using the revised amounts and straight-line method. Oa. $22,075.00 Ob. $21,075.00 Oc. $20,075.00 Od. $21,575.00
On January 1, Year 1, the Dole Company purchased an asset that cost $154,000. The asset had an expected useful life of seven years and no estimated residual value. The company initially decided to use sum-of-the-years'-digits (SYD) depreciation for both financial accounting and income tax purposes. Depreciation expense for the straight-line method and the sum-of-the-years'-digits method is as follows: Year Straight-line over 7 Years SYD over 7 Years Difference 1 $22,000 $38,500 $16,500 2 22,000 33,000 11,000 3 22,000 27,500 5,500 4 22,000 22,000 0 5 22,000 16,500 (5,500) 6 22,000 11,000 (11,000) 7 22,000 5,500 (16,500) $154,000 $154,000 $0 At the beginning of Year 4, Dole changed from the sum-of-the-years'-digits method to the straight-line method of depreciation for financial reporting purposes. The company's income tax rate is 30%. In Year 3 and Year 4, Dole had $90,000 pretax income before depreciation and income taxes. Required: a. Complete the…
On January 1, 20X1, Bixby Inc. purchased equipment costing $75,000. The equipment is estimated to have a residual value of $6,000 and a four-year useful life. If the asset had been placed into service on May 1, 20X1 instead of January 1, 20X1, what would be the depreciation expense recorded for the year ending 12/31/X1, assuming the straight-line method is used? Round to the nearest whole dollar.