1. What is the gain or loss c'est cheese would report on the sale of delivery van? On April 1, 2020, C'est Cheese issues 20,000 shares of 4%, $10 par, cumulative preferred stock$15 per share. It had previously issued 65,000 shares of $1 par, common stock. (HINT: make thejournal entry.)Using all of the proceeds from the issuance of the preferred stock, on the same day, it purchasesfixed assets for its operations, and allocates the proceeds from the stock issuance as follows:• 35% for a new milk-separating machine, with a salvage value of $2,000, which is estimated toseparate 100,000 gallons of milk over its 8-year useful life• 40% for a new refrigerator with a 10-year useful life, and a salvage value of $1,300, for which ituses straight-line●• 25% for a new delivery van with a 5-year useful life, and a salvage value of $5,000, for which ituses double-declining balanceOn May 31, 2022, after recording updated depreciation, it sells the delivery van for cash of$34,000. Then, using all of the proceeds from the sale of the delivery van, it declares a dividend,payable on July 22, 2022.

Analysis of question :— Cash received from issuance of preferred stock is used to purchase milk…

Answered: What is the gain or loss c'est cheese…

Business

Accounting

What is the gain or loss c'est cheese would report on the sale of delivery van

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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Question

1. What is the gain or loss c'est cheese would report on the sale of delivery van?

On April 1, 2020, C'est Cheese issues 20,000 shares of 4%, $10 par, cumulative preferred stock
$15 per share. It had previously issued 65,000 shares of $1 par, common stock. (HINT: make the
journal entry.)
Using all of the proceeds from the issuance of the preferred stock, on the same day, it purchases
fixed assets for its operations, and allocates the proceeds from the stock issuance as follows:
• 35% for a new milk-separating machine, with a salvage value of $2,000, which is estimated to
separate 100,000 gallons of milk over its 8-year useful life
• 40% for a new refrigerator with a 10-year useful life, and a salvage value of $1,300, for which it
uses straight-line
●
• 25% for a new delivery van with a 5-year useful life, and a salvage value of $5,000, for which it
uses double-declining balance
On May 31, 2022, after recording updated depreciation, it sells the delivery van for cash of
$34,000. Then, using all of the proceeds from the sale of the delivery van, it declares a dividend,
payable on July 22, 2022.

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