Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations: Disposal with no gain no loss : When the asset is disposed with no consideration received. Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation ). Disposal with loss: When the asset is disposed for less than its book value. Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below: Depreciation = ( Cost of the asset − Residual value ) Estimated useful life of the asset To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

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Answer 1

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

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Objective: The purpose of this exercise is to ensure that students can locate the audit requirements for a Single Audit. Scenario: A nonprofit organization, ABC Youth Services, receives $1.2 million in federal grant funding to provide after-school programs. The organization must comply with the Single Audit Act but is unfamiliar with the audit requirements. To guide the organization, please provide the information below. Use the federal regulations for Single Audits (2 CFR Part 200, Subpart F) as a reference for your responses. Why Is the non-profit subject to the Single Audit Requirements? Cite the federal regulation that applies.

Question 1Toodles Inc. had sales of $1,840,000. Cost of goods sold,administrative and selling expenses, and depreciation expenses were$1,180,000, $185,000 and $365,000 respectively. In addition, thecompany had an interest expense of $280,000 and a tax rate of 35percent. (Ignore any tax loss carry-back or carry-forward provisions.)Arrange the financial information for Toodles Inc. in an incomestatement and compute its OCF?

Answer 2

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Expert Solution & Answer

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Answer 3

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 6

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

Answer 7

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

Answer 8

B.

To determine

the book value of the equipment on January 1of Year 4.

Answer 9

B.

To determine

the book value of the equipment on January 1of Year 4.

Answer 10

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 11

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 12

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 13

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 9 - ONeil Office Supplies has a fleet of automobiles...Ch. 9 - Prob. 2DQ Ch. 9 - Prob. 3DQ Ch. 9 - Distinguish between the accounting for capital...Ch. 9 - Immediately after a used truck is acquired, a new...Ch. 9 - Keyser Company purchased a machine that has a...Ch. 9 - Is it necessary for a business to use the same...Ch. 9 - A. Under what conditions is the use of an...Ch. 9 - For some of the fixed assets of a business, the...Ch. 9 - A. Over what period of time should the cost of a...

Solution Summary: The author explains the straight-line method of depreciation, wherein the same amount is allocated every year over the estimated useful life of an asset.

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the book value of the equipment on January 1of Year 4.

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

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Chapter 9 Solutions