Financial Accounting (5th Edition) (What's New in Accounting)
5th Edition
ISBN: 9780134727790
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 8, Problem 56BP
1. a.
To determine
Record the disposition of the equipment assuming that Industries F discarded the equipment, receiving zero.
b.
To determine
Record the disposition of the equipment assuming that Industries F sold the equipment for $6,000 cash.
c.
To determine
Record the disposition of the equipment assuming that Industries F traded in new equipment for the old one.
d.
To determine
Record the disposition of the equipment assuming that Industries F traded in new equipment for the old one by signing a note payable for the difference amount.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
(Learning Objectives 3, 4: Compute depreciation; record a gain or loss on disposal)On January 1, 2017, Lincoln Manufacturing purchased a machine for $930,000. The companyexpected the machine to remain useful for eight years and to have a residual value of $110,000.Lincoln Manufacturing uses the straight-line method to depreciate its machinery. LincolnManufacturing used the machine for four years and sold it on January 1, 2021, for $250,000.1. Compute accumulated depreciation on the machine at January 1, 2021 (same as December 31,2020).2. Record the sale of the machine on January 1, 2021.
. (Learning Objectives 1, 3, 4: Measure and account for the cost of plant assets anddepreciation; analyze and record a plant asset disposal) Blair, Inc., has the following plantasset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciationaccount for each of these except Land. Blair completed the following transactions:Jan 3 Traded in equipment with accumulated depreciation of $63,000 (cost of$130,000) for similar new equipment with a cash cost of $171,000. Receiveda trade-in allowance of $71,000 on the old equipment and paid $100,000in cash.Jun 30 Sold a building that had a cost of $635,000 and had accumulated depreciationof $170,000 through December 31 of the preceding year. Depreciationis computed on a straight-line basis. The building has a 40-year useful lifeand a residual value of $295,000. Blair received $135,000 cash and a$325,750 note receivable.Oct 31 Purchased land and a building for a single price of $340,000 cash. An independent appraisal valued…
(Learning Objectives 1, 4: Allocate costs to assets acquired in a lump-sumpurchase; dispose of a plant asset) Sugar Ridge Manufacturing bought three used machines ina $167,000 lump-sum purchase. An independent appraiser valued the machines as shown:Machine No. Appraised Value123$ 38,25073,10058,650What is each machine’s individual cost? Immediately after making this purchase, Sugar Ridgesold Machine No. 3 for its appraised value. What is the result of the sale? (Round decimals to threeplaces when calculating proportions, and use your computed percentages in all calculations.)
Chapter 8 Solutions
Financial Accounting (5th Edition) (What's New in Accounting)
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - What is depreciation, and why is it used in...Ch. 8 - Prob. 5DQCh. 8 - Which depreciation method would be moot...Ch. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 1SCCh. 8 - Prob. 2SCCh. 8 - How should a capital expenditure for a long-term...Ch. 8 - Which depreciation method usually produces the...Ch. 8 - Prob. 5SCCh. 8 - Prob. 6SCCh. 8 - Prob. 7SCCh. 8 - Prob. 8SCCh. 8 - Prob. 9SCCh. 8 - Prob. 10SCCh. 8 - Prob. 11SCCh. 8 - Prob. 12SCCh. 8 - Prob. 1SECh. 8 - Long-term asset terms (Learning Objective 1) 5-10...Ch. 8 - Prob. 3SECh. 8 - Lump-sum purchase (Learning Objective 2) 5-10 min....Ch. 8 - Errors in accounting for long-term assets...Ch. 8 - Concept of depreciation (Learning Objective 3)...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Prob. 9SECh. 8 - Prob. 10SECh. 8 - Prob. 11SECh. 8 - Prob. 12SECh. 8 - Prob. 13SECh. 8 - Prob. 14SECh. 8 - Prob. 15SECh. 8 - Other long term assets (Learning Objective 8) 5-10...Ch. 8 - Prob. 17SECh. 8 - Prob. 18AECh. 8 - Prob. 19AECh. 8 - Prob. 20AECh. 8 - Prob. 21AECh. 8 - Depreciation methods (Learning Objective 3) 15-20...Ch. 8 - Prob. 23AECh. 8 - Prob. 24AECh. 8 - Prob. 25AECh. 8 - Prob. 26AECh. 8 - Prob. 27AECh. 8 - Prob. 28AECh. 8 - Prob. 29AECh. 8 - Prob. 30AECh. 8 - Prob. 31AECh. 8 - Prob. 32BECh. 8 - Prob. 33BECh. 8 - Prob. 34BECh. 8 - Prob. 35BECh. 8 - Prob. 36BECh. 8 - Prob. 37BECh. 8 - Prob. 38BECh. 8 - Prob. 39BECh. 8 - Prob. 40BECh. 8 - Prob. 41BECh. 8 - Prob. 42BECh. 8 - Prob. 43BECh. 8 - Prob. 44BECh. 8 - Prob. 45BECh. 8 - Long-term asset costs and partial-year...Ch. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 48APCh. 8 - Prob. 49APCh. 8 - Prob. 50APCh. 8 - Prob. 51APCh. 8 - Prob. 52APCh. 8 - Prob. 53BPCh. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 55BPCh. 8 - Prob. 56BPCh. 8 - Prob. 57BPCh. 8 - Prob. 58BPCh. 8 - Prob. 59BPCh. 8 - Prob. 1CECh. 8 - Prob. 1CPCh. 8 - Continuing Financial Statement Analysis Problem...Ch. 8 - Prob. 1EIACh. 8 - Prob. 2EIACh. 8 - Financial Analysis Purpose: To help familiarize...Ch. 8 - Prob. 1IACh. 8 - Prob. 1SBACh. 8 - Written Communication A client of yours notified...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- (Learning Objectives 3, 4: Compute depreciation; record a gain or loss on disposal)On January 1, 2017, Worldwide Manufacturing purchased a machine for $810,000 that itexpected to have a useful life of four years. The company estimated that the residual value ofthe machine was $50,000. Worldwide Manufacturing used the machine for two years and soldit on January 1, 2019, for $350,000. As of December 31, 2018, the accumulated depreciation onthe machine was $380,000.1. Calculate the gain or loss on the sale of the machinery.2. Record the sale of the machine on January 1, 2019.arrow_forward(Learning Objective 3: Compute and record depreciation after a change in usefullife of the asset) Fun Town Amusement Park paid $500,000 for a concession stand. Fun Townstarted out depreciating the building using the straight-line method over 25 years with a residualvalue of zero. After using the concession stand for four years, Fun Town determines that thebuilding will remain useful for only five more years. Record Fun Town’s depreciation on theconcession stand for year five using the straight-line method.arrow_forwardE7-22A. (Learning Objective 1: Measure the cost of plant assets) Murphy Self Storagepurchased land, paying $160,000 cash as a down payment and signing a $185,000 note payablefor the balance. Murphy also had to pay delinquent property tax of $2,000, title insurance costing$6,000, and $11,000 to level the land and remove an unwanted building. The company paid$58,000 to add soil for the foundation and then constructed an office building at a cost of $700,000.It also paid $52,000 for a fence around the property, $11,000 for the company sign near theproperty entrance, and $3,000 for lighting of the grounds. What is the capitalized cost of eachof Murphy’s land, land improvements, and building?arrow_forward
- (Learning Objective 5: Record natural resource assets and depletion) BearcreekMines paid $433,000 for the right to extract ore from a 450,000-ton mineral deposit. In addition to the purchase price, Bearcreek Mines paid a $155 filing fee to the county recorder, a$2,800 license fee to the state of Utah, and $95,045 for a geologic survey. Because the companypurchased the rights to the minerals only, it expects this mineral rights asset to have a residualvalue of zero when it is fully depleted. During the first year of production, Bearcreek Minesremoved 75,000 tons of ore, of which it sold 72,000 tons. Make journal entries to record (a)purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-yearproduction, and (d) cost of the ore sold. Round depletion per unit to the closest cent.arrow_forward(Learning Objective 5: Record natural resource assets and depletion) MineralMines paid $425,000 for the right to extract ore from a 250,000-ton mineral deposit. In additionto the purchase price, Mineral Mines paid a $110 filing fee to the country recorder, a $2,000license fee to the state of Colorado, and $55,390 for a geologic survey. Because the companypurchased the rights to the minerals only, it expects this mineral rights asset to have a residualvalue of zero when it is fully depleted. During the first year of production, Mineral Minesremoved 35,000 tons of ore, of which it sold 29,000 tons. Make journal entries to record (a)purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-yearproduction, and (d) cost of the ore sold. Round depletion per unit to the closest centarrow_forwardAn automated inspection system purchased at a cost of $400,000 by Mega Tech Engineering was depreciated using the MACRS method. Determine the accumulated depreciation through year 4. Group of answer choices $275,040 $137,520 $206,280 $68,760arrow_forward
- (Learning Objectives 5, 6: Record intangibles, amortization, and impairment)1. Milton Printers incurred external costs of $700,000 for a patent for a new laser printer.Although the patent gives legal protection for 20 years, it was expected to provide Miltonwith a competitive advantage for only eight years due to expected technological advancesin the industry. Milton uses the straight-line method of amortization.2. After using the patent for four years, Milton learned at an industry trade show thatAnderson Printers has patented a more efficient printer and will begin selling the newprinter next quarter. Because of this new information, Milton determined that the expectedfuture cash flows from its patent were now only $270,000. The fair value of Milton’spatent on the open market was now zero.Requirements1. Write the journal entries to record (a) the purchase of the patent and (b) amortization for year 1.2. Once Milton learned of the competing printer and adjusted the expected future…arrow_forwardE9-22 Recording partial-year depreciation and sale of an asset Learning Objectives 2, 3 Depr. Exp. $3,400 On January 2, 2017, Comfy Clothing Consignments purchased showroom fixtures for $17,000 cash, expecting the fixtures to remain in service for five years. Comfy has depreciated the fixtures on a double-declining-balance basis, with zero residual value. On October 31, 2018, Comfy sold the fixtures for $7,600 cash. Record both depreciation expense for 2018 and sale of the fixtures on October 31, 2018.arrow_forwardPrepare the journal entry to record TWO of the following scenarios. Please be sure to identify which scenarios you have selected. (a) Discarding of Machine #1: Original cost, $25,000; accumulated depreciation, $20,000. (b) Sale of Machine #2: Original cost, $50,000; accumulated depreciation, $35,000; sold for $18,000 cash. (c) Sale of Machine #3: Original cost, $75,000; accumulated depreciation, $65,000; sold for $4,000 cash.arrow_forward
- Can you help solve this. Pleasearrow_forwardMohr Company purchases a machine at the beginning of the year at a cost of $24,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 5 years with a $4,000 salvage value. The machine’s book value at the end of year 2 is: A. $12,000. B. $7,200. C. $9,600. D. $8,640. E. $14,400.arrow_forwardA company purchased a delivery van for $24,900 with a salvage value of $2,700 on October 1, Year 1. It has an estimated useful life of 6 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1? Multiple Choice O O $3,700. $925. $4,150. $77. $1,383. 83arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY