The Journal entry for recording acquisition of the plant. Given information: Cost of purchasing power plant is $15,000,000. Cost of dismantle and restoring property is $850,000. Company is using straight line method of depreciation. Cost of capital given is 6% Estimated life of the power plant is 25 years. Cost of dismantling and restoring is $310,000. Plant is sold for $11,000,000.

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Answer 1

Question

Chapter 13, Problem 13.7E

a.

To determine

To prepare: The Journal entry for recording acquisition of the plant.

Given information:

Cost of purchasing power plant is $15,000,000.

Cost of dismantle and restoring property is $850,000.

Company is using straight line method of depreciation.

Cost of capital given is 6%

Estimated life of the power plant is 25 years.

Cost of dismantling and restoring is $310,000.

Plant is sold for $11,000,000.

b.

To determine

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

c.

To determine

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

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General accounting question

Excellence Foods earned net sales revenue of $82,750,000 in 2023. The cost of goods sold was $61,320,000, and net income reached $15,600,000, the company's highest to date. Compute the company's gross profit percentage for 2023.

Please explain the correct approach for solving this general accounting question.

Answer 2

Question

Chapter 13, Problem 13.7E

a.

To determine

To prepare: The Journal entry for recording acquisition of the plant.

Given information:

Cost of purchasing power plant is $15,000,000.

Cost of dismantle and restoring property is $850,000.

Company is using straight line method of depreciation.

Cost of capital given is 6%

Estimated life of the power plant is 25 years.

Cost of dismantling and restoring is $310,000.

Plant is sold for $11,000,000.

b.

To determine

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

c.

To determine

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

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Answer 3

Question

Chapter 13, Problem 13.7E

a.

To determine

To prepare: The Journal entry for recording acquisition of the plant.

Given information:

Cost of purchasing power plant is $15,000,000.

Cost of dismantle and restoring property is $850,000.

Company is using straight line method of depreciation.

Cost of capital given is 6%

Estimated life of the power plant is 25 years.

Cost of dismantling and restoring is $310,000.

Plant is sold for $11,000,000.

b.

To determine

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

c.

To determine

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

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Answer 4

Question

Chapter 13, Problem 13.7E

a.

To determine

To prepare: The Journal entry for recording acquisition of the plant.

Given information:

Cost of purchasing power plant is $15,000,000.

Cost of dismantle and restoring property is $850,000.

Company is using straight line method of depreciation.

Cost of capital given is 6%

Estimated life of the power plant is 25 years.

Cost of dismantling and restoring is $310,000.

Plant is sold for $11,000,000.

b.

To determine

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

c.

To determine

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

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Answer 5

Chapter 13, Problem 13.7E

a.

To determine

To prepare: The Journal entry for recording acquisition of the plant.

Given information:

Cost of purchasing power plant is $15,000,000.

Cost of dismantle and restoring property is $850,000.

Company is using straight line method of depreciation.

Cost of capital given is 6%

Estimated life of the power plant is 25 years.

Cost of dismantling and restoring is $310,000.

Plant is sold for $11,000,000.

b.

To determine

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

c.

To determine

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

Answer 6

Chapter 13, Problem 13.7E

a.

To determine

To prepare: The Journal entry for recording acquisition of the plant.

Given information:

Cost of purchasing power plant is $15,000,000.

Cost of dismantle and restoring property is $850,000.

Company is using straight line method of depreciation.

Cost of capital given is 6%

Estimated life of the power plant is 25 years.

Cost of dismantling and restoring is $310,000.

Plant is sold for $11,000,000.

Answer 7

Chapter 13, Problem 13.7E

a.

To determine

To prepare: The Journal entry for recording acquisition of the plant.

Given information:

Cost of purchasing power plant is $15,000,000.

Cost of dismantle and restoring property is $850,000.

Company is using straight line method of depreciation.

Cost of capital given is 6%

Estimated life of the power plant is 25 years.

Cost of dismantling and restoring is $310,000.

Plant is sold for $11,000,000.

Answer 8

b.

To determine

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

Answer 9

b.

To determine

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

Answer 10

c.

To determine

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

Answer 11

c.

To determine

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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Solution Summary: The author explains the journal entry for recording acquisition of the plant.

To prepare: The journal for recording first year’s depreciation and accretion accrual on the plant.

To prepare: The journal for recording disposal and settlement of the plant at the end of fifth year.

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Chapter 13 Solutions