Loose-leaf for Fundamentals of Financial Accounting with Connect
5th Edition
ISBN: 9781259619007
Author: Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter 9, Problem 9.8ME
(a)
To determine
Gain on sale reported by Incorporation LC in 2011
(2)
To determine
Income from operations reported in 2011, had the gain on sale not been included
(c)
To determine
Income from operations reported in 2013, had the impairment losses not been included
(d)
To determine
The percentage of impairment losses in income from operations, before impairment
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In 2016, Hye Industries decided to discontinue its Laminating Division, a separately identifiable component of Hye’s business. At December 31, 2016, the division has not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner, and it is probable that the disposal will be completed within a year. Analysis of the records disclosed the following:
Operating loss for the year
899,000
Loss on disposal of some assets during 2016
50,000
Expected operating loss in 2017
450,000
Expected gain in 2017 on disposal of division
200,000
Assuming a 35% tax rate, how much will be reported as loss from discontinued operations in Hye’s 2016 income statement?
SEAT Inc. acquired the following assets in January of 2015.
Equipment, estimated service life, 5 years; salvage value, $16,200 $503,700
Building, estimated service life, 30 years; no salvage value $648,000
The equipment has been depreciated using the sum-of-the-years’-digits method for the first 3 years for financial reporting purposes. In 2018, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method.
(a) Prepare the journal entry to record depreciation expense for the equipment in 2018.
(b) Prepare the journal entry to record depreciation expense for the building in 2018.
Chapter 9 Solutions
Loose-leaf for Fundamentals of Financial Accounting with Connect
Ch. 9 - Define long-lived assets. What are the two common...Ch. 9 - Under the cost principle, what amounts should be...Ch. 9 - What is the term for recording costs as assets...Ch. 9 - 4. Waste Management, Inc., regularly incurs costs...Ch. 9 - Distinguish between ordinary repairs and...Ch. 9 - Describe the relationship between the expense...Ch. 9 - Why are different depreciation methods allowed?Ch. 9 - In computing depreciation, three values must be...Ch. 9 - Prob. 9QCh. 9 - After merging with Northwest Airlines, Delta...
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