The following balances were taken from the books of Swifty Corp. on December 31, 2020. Accumulated depreciation-equipment Accumulated depreciation-buildings Interest revenue Cash Sales revenue Accounts receivable Prepaid insurance Sales returns and allowances, Allowance for doubtful accounts Sales discounts Land $87,100 52,100 1,381,100 151.100 21,100 151,100 8,100 46,100 101.100 Notes receivable Selling expenses Accounts payable Bonds payable Administrative and general expenses Accrued liabilities Interest expense $41,100 29,100 156,100 195,100 171.100 101,100 98,100 33,100 61,100
The following balances were taken from the books of Swifty Corp. on December 31, 2020. Accumulated depreciation-equipment Accumulated depreciation-buildings Interest revenue Cash Sales revenue Accounts receivable Prepaid insurance Sales returns and allowances, Allowance for doubtful accounts Sales discounts Land $87,100 52,100 1,381,100 151.100 21,100 151,100 8,100 46,100 101.100 Notes receivable Selling expenses Accounts payable Bonds payable Administrative and general expenses Accrued liabilities Interest expense $41,100 29,100 156,100 195,100 171.100 101,100 98,100 33,100 61,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:The following balances were taken from the books of Swifty Corp. on December 31, 2020.
Accumulated depreciation-equipment
Accumulated depreciation-buildings
Interest revenue
Cash
Sales revenue
Accounts receivable
Prepaid insurance
Sales returns and allowances
Allowance for doubtful accounts
Sales discounts
Land
Equipment
Buildings
Cost of goods sold
$87,100
52,100
Sales
1,381,100
151.100
21,100
151,100
8,100
46,100
101,100
201,100
141,100
622,100
Notes receivable
Selling expenses
Accounts payable i
Bonds payable
Administrative and general expenses
Accrued liabilities
Interest expense
Notes payable
Loss from earthquake damage
Common stock
Retained earnings
$41,100
SWIFTY CORP.
Income Statement
For the Year Ended December 31, 2020
29,100
156,100
195,100
171.100
101,100
98,100
(33,100
61,100
101,100
151,100
501,100
Assume the total effective tax rate on all items is 20%.
Prepare a multiple-step income statement: 100,000 shares of common stock were outstanding during the year. (Round earnings per
share to 2 decimal places, e.g. 1.48.)
22,100
$1.381.100
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