Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 11, Problem 7GI
To determine
Describe the manner in which the
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Carlyon Company listed the following items in its December 31, Year 1, financial statements:
Investment in Man Company bonds
$21,000
Dividends payable: preferred
4,000
Dividends payable: common
50,000
Preferred stock, 8%, $100 par
100,000
Common stock, $10 par
500,000
Additional paid-in capital on preferred stock
20,000
Additional paid-in capital on common stock
262,500
Retained earnings
270,000
During Year 2, the following transactions occurred:
Feb.
2
Paid the semiannual dividends declared on December 15, Year 1.
Mar.
5
Declared a property dividend, payable to common shareholders on April 5 in Man Company bonds being held to maturity. The bonds (which have a book value of $21,000) have a current market value of $30,000.
Apr.
5
Paid the property dividend.
Jul.
6
Declared a $4 per share semiannual cash dividend on preferred stock and a $1.10 per share semiannual dividend on common stock, to be paid on August 17.
Aug.
17
Paid the cash dividends.…
Required information
[The following information applies to the questions displayed below.]
Jarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an
employee discount. At Jarvie's current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year
at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie
bought the following bikes:
Description
Retail Price
Specialized road bike
$ 4,000
Cost
$ 3,600
Employee
Price
$ 2,800
Rocky Mountain mountain bike
5,000
4,100
4,000
Trek road bike
3,900
3,300
2,730
Yeti mountain bike
4,600
3,400
3,680
b. What amount of deductions is Bad Dog allowed to claim from these transactions?
Amount of deductions
Jarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an
employee discount. At Jarvie's current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year
at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie
bought the following bikes:
Description
Retail Price
Specialized road bike
$ 4,000
Cost
$ 3,600
Employee
Price
$ 2,800
Rocky Mountain mountain bike
5,000
4,100
4,000
Trek road bike
3,900
3,300
2,730
Yeti mountain bike
4,600
3,400
3,680
a. What amount is Jarvie required to include in taxable income from these purchases?
Amount to be included
Chapter 11 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 11 - Briefly explain the meaning of the four factors...Ch. 11 - Prob. 2GICh. 11 - Would it be desirable to require all companies to...Ch. 11 - What is the depredation base?Ch. 11 - Prob. 5GICh. 11 - A company should use an accelerated depreciation...Ch. 11 - Prob. 7GICh. 11 - Prob. 8GICh. 11 - Prob. 9GICh. 11 - Prob. 10GI
Ch. 11 - Under U.S. GAAP, in a year in which the fair value...Ch. 11 - Prob. 12GICh. 11 - Prob. 13GICh. 11 - Compare the group and composite methods of...Ch. 11 - Prob. 15GICh. 11 - Describe the accounting for changes and...Ch. 11 - Prob. 17GICh. 11 - Prob. 18GICh. 11 - Explain the meaning of an impaired asset and...Ch. 11 - Prob. 20GICh. 11 - Prob. 21GICh. 11 - Prob. 22GICh. 11 - (Appendix 11.1) Why might depreciation on a...Ch. 11 - A method that excludes residual value from the...Ch. 11 - Vorst depreciates Asset A on the...Ch. 11 - Using the sum-of-the-years-digits method, how much...Ch. 11 - Vorst depreciates Asset C by the straight-line...Ch. 11 - A machine with a 4-year estimated useful life and...Ch. 11 - At the end of the expected useful life of a...Ch. 11 - The composite depreciation method: a. is applied...Ch. 11 - On July 1, 2018, Mundo Corporation purchased...Ch. 11 - A fixed asset with a 5-year estimated useful life...Ch. 11 - Crowder Company acquired a tract of land...Ch. 11 - Susquehanna Company purchased an asset at the...Ch. 11 - Akron Incorporated purchased an asset at the...Ch. 11 - Albany Corporation purchased equipment at the...Ch. 11 - Utica Machinery Company purchases an asset for...Ch. 11 - In Year 1, Utica Machinery Company uses the asset...Ch. 11 - At the beginning of Year 1, Herkimer Co....Ch. 11 - At the end of Year 1, Herkimer Co. sells two...Ch. 11 - Buffalo, Inc., uses composite depreciation for its...Ch. 11 - Prob. 9RECh. 11 - Assume the same information as in RE11-3, except...Ch. 11 - Oneonta Co. owns equipment with a cost of 300,000...Ch. 11 - At the beginning of the current year, Andy Company...Ch. 11 - Prob. 13RECh. 11 - (Appendix 11.1) Auburn Company purchased an asset...Ch. 11 - Depreciation Methods Gruman Company purchased a...Ch. 11 - Depreciation Methods Sorter Company purchased...Ch. 11 - Depreciation Methods Nickle Company purchased...Ch. 11 - Determination of Acquisition Cost On January 1,...Ch. 11 - Comprehensive: Acquisition, Subsequent...Ch. 11 - Prob. 6ECh. 11 - Loban Company purchased four cars for 9,000 each...Ch. 11 - Wilcox Company acquires four machines that have...Ch. 11 - Lightning Delivery Company purchased a new...Ch. 11 - Hathaway Company purchased a copying machine for...Ch. 11 - On May 10, 2019, Horan Company purchased equipment...Ch. 11 - Reveille, Inc., purchased Machine #204 on April 1,...Ch. 11 - Bailand Company purchased a building for 210,000...Ch. 11 - On January 1, 2019, Barbosa Company purchased a...Ch. 11 - On January 1, 2015, Vallahara Company purchased...Ch. 11 - Swann Company sold a delivery truck on April 1,...Ch. 11 - On July 1, 2019, Osceola Company retired a metal...Ch. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - (Appendix 11.1) Depreciation for Financial...Ch. 11 - Depreciation Methods Winsey Company purchased...Ch. 11 - Depreciation Methods Lord Company purchased a...Ch. 11 - Depreciation Methods Sayers Company purchased a...Ch. 11 - Cost of Asset and Depreciation Method Heist...Ch. 11 - Group and Composite Depreciation Chcadle Company...Ch. 11 - Borrell Company purchased four delivery trucks on...Ch. 11 - Dinnell Company owns the following assets: In the...Ch. 11 - Kam Company purchased a machine on January 2,...Ch. 11 - During 2019, Ryel Companys controller asked you to...Ch. 11 - Petes Petroleum, Inc., an SEC registrant with a...Ch. 11 - On January 1, 2014, Borstad Company purchased...Ch. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Hunter Company purchased a light truck on January...Ch. 11 - Logan Corporation, a manufacturer of steel...Ch. 11 - On January 2, 2019, Brock Corporation purchased a...Ch. 11 - On December 31, 2019, Vail Company owned the...Ch. 11 - Soon after December 31, 2019, the auditor...Ch. 11 - Prob. 19PCh. 11 - Pell Corporations Property, Plant, and Equipment...Ch. 11 - Prob. 21PCh. 11 - Prob. 1CCh. 11 - Prob. 2CCh. 11 - Straight-Line and Composite Depreciation Portland...Ch. 11 - Depreciation continues to be one of the most...Ch. 11 - The following two statements concern depreciation:...Ch. 11 - Prob. 6C
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