Subject: General Accounting The F Company sold the land for $86,000 in cash. The land wasoriginally purchased for $56,000, and at the time of the sale, $17,000was still owed to First National Bank on that purchase. After the sale,The F Company paid off the loan to First National Bank. What is theeffect of the sale and the payoff of the loan on the accountingequation? 1. assets increase by $20,000; liabilities decrease by$15,000; owner's equity increases by $5,000. 2. assets increase by$60,000; liabilities decrease by $15,000; owner's equity increases by$20,000. 3. assets increase by $13,000; liabilities decrease by$17,000; owner's equity increases by $30,000. 4. assets increase by$20,000; liabilities decrease by $15,000; owner's equity increases by$35,000

Concept of AssetsAssets are economic resources owned by a company that have monetary value and…

Answered: The F Company sold the land for $86,000…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter2: Basic Accounting Systems: Cash Basis

Section: Chapter Questions

Problem 6CDQ: Capstone Consulting Services acquired land 5 years ago for $200,000. Capstone recently signed an...

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a. A vacant lot acquired for $115,000 is sold for $298,000 in cash. What is the effect of the sale on the total amount of the seller’s (1) assets, (2) liabilities, and (3) owner’s equity?b. Assume that the seller owes $80,000 on a loan for the land. After receiving the $298,000 cash in (a), the seller pays the $80,000 owed. What is the effect of the payment on the total amount of the seller’s (1) assets, (2) liabilities, and (3) owner’s equity?c. Is it true that a transaction always affects at least two elements (Assets,Liabilities, or Owner’s Equity) of the accounting equation? Explain.
An asset that cost $20,000 and on which depreciation of $15,000 has been recorded is traded in on a new replacement asset. The sales price, also the fair value, of the new asset is $27,000. The owner of the old asset was given an allowance of $7,000 for the old asset and paid $20,000 in cash. For financial accounting purposes, what is the amount of gain or loss recorded? Question 5 options: a. a gain of $2,000 b. no gain or loss c. a loss of $2,000 d. a gain of $7,000
QUESTION 5 Below are relevant extracts from Pitzer Bhd's financial statements for the financial year ended 31 December 2020 and 31 December 2021: 2020 (RM) 2021 (RM) ASSETS: Freehold land Plant and machinery at cost Inventories Bank Tax recoverable 386,000 182,000 44,000 13,000 6,000 20,000 86,400 737,400 477,000 212,000 52,000 55,000 Fixed deposits Account receivables 27,000 97,200 920,200 LIABILITIES & EQUITIES Ordinary Share Capital General reserve Retained earnings 5% Bank loan Bank overdraft Account payables Tax payable Accumulated depreciation of Plant & Machinery 264,000 112,420 36,400 169,400 13,400 69,780 364,000 112,420 135,280 135,400 7,600 62,340 9,960 93,200 920,200 72,000 737,400
H1.
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
In 20x7, Sweet Treats sold a piece of equipment with a purchase value of $371,000 and acumulated depreciation of $247,000 for $75,000. Sweet Treats realized a loss of $49.000 n the sale HoW Would this transaction affect overall cash flows? O a Cash flows would increase by $26.000, 0b Cash flows would increase by S49.00 0¢ Cash flows would ncrease by $75.00 0d Cash flows would decrease by $49.00
D7
6. a. A business worth $ 900,000 purchased on land with an appraised value of $ 750,000 for property taxes. Ten years later, the parcel has an estimated value of $ 1,200,000 and the company receives an offer of $ 2,000,000 for it. Should I now increase the monetary amount allocated to land in business records? yes. Assuming that the land acquired in (a) was sold for $ 2,125,000, how would the various elements of the accounting equation be affected?
Sansoni Services exchanged an asset with cost of $20,000 (now 30% depreciated) for a similar asset worth $18,000. Sansoni received $2,000 boot. In the entry to record this exchange, Sansoni should record a. A $6,000 gain b. A $600 gain c. No gain or loss d. A $600 loss
In year 1, Firm A paid $49,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,040 and $6,600 depreciation with respect to the asset. Firm A's marginal tax rate in both years was 21 percent. Required: a. Compute Firm A's net cash flow attributable to the asset purchase in each year. b. Compute Firm A's adjusted basis in the asset at the end of each year. Complete this question by entering your answers in the tabs below. Required A Required B Compute Firm A's net cash flow attributable to the asset purchase in each year. Note: Cash outflows should be indicated by a minus sign. Round your intermediate calculations and final answers to nearest whole dollar amount. Before-tax cash flows Tax (cost) or savings Net cash flow Year 1 Year 2
2. Soft Oil Company has an ORI in an unproved property for which it paid $80,000. The ORI has not been impaired. Soft sells 60% of the ORI for a cash consideration of $106,000. The amount of the credit for the Gain on the sale of ORI entry will be ?
A printer that cost $600 and has been owned for 2 years is traded in for a new one. Depreciation in the amount of $120 had been taken each yearThe new printer has a fair market value of $1,250. A trade-in allowance of $400 is granted, and the balance is paid in cashThe transaction to enter the exchanges of these two assets would result in the recognition of?

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