Oki Company pays $294,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. Paid $19,350 cash for a new component that increased the equipment’s productivity. Paid $4,838 cash for minor repairs necessary to keep the equipment working well. Paid $12,300 cash for significant repairs to increase the useful life of the equipment from four to seven years. Note: Enter debits before credits.
Q: Page 9 & page 12! Goodman Company acquired a truck from Harmes Company in exchange for a machine.…
A: Journal entry is a process of initially recording and classifying business transactions into books…
Q: A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value…
A: Depreciation is the total loss in value of an asset over the life of the asset. The value of asset…
Q: Cash Accounts receivable Inventory Prepaid insurance Equipment Accumulated depreciation-equipment…
A: Cash flow statement is one of the financial statements. It is prepared in order to check the cash…
Q: Q.3.1 Calculate the profit or loss on the sale of the office computer (Office equipment) by (8)…
A: The term depreciation represents the deduction in the value of an asset due to its usage and time…
Q: Revaluation surplus INCOME STATEMENT Depreciation expense Comprehensive income Gain on revaluation…
A: Introduction: Valuation of tangible assets helps to know the exact value of asset in market and…
Q: The only long-term liability of Range Corporation is a note payable for $1 million secured by a…
A: The financial commitments of a corporation that are due more than a year from now are known as…
Q: 11. Zoe has been depositing $900 every month into her retirement account for 35 years. The annual…
A: Depositing amounts regularly in an interest earning account will accumulate a large amount at the…
Q: taxpayer's marginal federal and A. $1.40 taxable income rather th
A: As per the guidelines, incase of multiple unrelated questions, only the first question is answered,…
Q: SOLVE THE FOLLOWING USING EXCEL 8. A manager is trying to decide whether to purchase a certain part…
A: Variable cost is a production expense that increases or decreases depending on changes in a…
Q: Inventory Turnover and Days' Sales in Inventory Shown below are data from the Northern Company's…
A: The ratio analysis helps to analyse the financial statements of the business on the basis of various…
Q: A CNC (computer numerical control) machine produces a particular part in batches of 125 units. Each…
A: Sometimes, manufacturers manufacture the product not in a single unit but rather, it produces in…
Q: Scenario Two: "What if" Analysis Your client would like to consider adding ice cream cakes to the…
A: In what if analysis we calculate the profit or loss realising out of a new activity.…
Q: A plant asset with a cost of $40,000 and accumulated depreciation of $36,000 is sold for $6,000.…
A: Lets understand the basics. When asset is sold and if proceeds exceed the book value then asset is…
Q: 10. process. All material is added at the beginning of the Costs Material 3,600 Conversion Beginning…
A: Equivalent units: Equivalent units of production are an indication to show the work in process…
Q: Q2. Consult Paragraphs 3-6 of Quality Control Standard No. 20 (QC 20). Considering the example in…
A: Introduction: Quality Control Standard: It provides that a CPA firm should have a system of quality…
Q: Demand at Nature Trails Ski Resort has a seasonal pattern. Demand is highest during the winter, as…
A: Season Year 1 Year 2 Fall 188 221 Winter 1357 1630 Spring 537 555 Summer 695 793 Total…
Q: You were delayed for 13 days from date of delivery time. A standard liquidated damages (LD) is…
A: First of all, let us try and understand the meaning of the term liquidated damages. So here,…
Q: Exercise 9-8A Current liabilities The following transactions apply to Mabry Equipment Sales Corp.…
A: Current liabilities are the liabilities which are due to be paid within 12 months. Example:…
Q: In its first year of operations a company produced and sold 70,000 units of Product A at a selling…
A: Solution: Predetermined overhead rate = Estimated overhead / Estimated direct labor cost = $608,000…
Q: LO 1 Exercise 11-1A Effect of accounting events on the financial statements of a sole proprietorship…
A: Income Statement :— It is one of the financial statement that shows profitability of company during…
Q: Echo Corporation had the following balances immediately prior to writing off a $100 uncollectible…
A: The current ratio is a liquidity ratio that measures a company's ability to pay short-term…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160,…
A: Lets understand the basics. Traceable overhead is a overhead which can be traced on the product. In…
Q: Current Attempt in Progress Sheridan Inc. reported the following for 2023: Sales Revenue Cost of…
A: The comprehensive income statement is a combined financial statement that indicates standard income…
Q: Discuss: How have government accounting evolved since independence on Barbados. How has this country…
A: Since independence, government accounting in Barbados has evolved to become more sophisticated and…
Q: Liang Company began operations in Year 1. During its first two years, the company completed a number…
A: Journals and ledgers are two types of books that are often used to summarize financial and other…
Q: Credit unions are Group of answer choices not providers of insured deposits. mutual associations.…
A: Introduction: Usually unions are financial organizations that are arranged in a cooperative model.…
Q: Nissley Wedding Fantasy Corporation makes very elaborate wedding cakes to order. The owner of the…
A: Solution: Activity cost assigned to product = Estimated usage of allocation based * Activity rate…
Q: Assume a company manufactures only two products—14,000 units of Product C and 6,000 units of Product…
A: Solution:
Q: Dick's Draperies has gross sales $15,000 per month, half of which are on credit (paid with 30 days).…
A: Lets understand the basics. Cashflow statement is need to prepare to understand the cash inflow and…
Q: A corporation has 12 000 ordinary shares and options to purchase 1 500 ordinary shares at R10 per…
A: Earnings Per share Earnings per share (EPS) measures a firm's profitability on a per-share basis…
Q: Problem 4-25A (Algo) Basic transactions for three accounting cycles: Perpetual system LO 4-1, 4-6…
A: The income statement and balance sheet are important financial statements of the business. The…
Q: SOLVE THE FOLLOWING USING EXCEL 1. Determine the utilization and efficiency for each of the…
A: Efficiency The ability to do a task with little to no waste, effort or energy is referred to as…
Q: LO 4 Exercise 10-15A Straight-line amortization of a bond discount Farm Supplies, Inc., issued…
A: Interest is defined as any compensation made to the party from whom money has been taken on credit.…
Q: eceiving Number setup pection Inspection time For the basic model is 250 units, for the adva of…
A: Overhead allocated = ($2 per part* 15 part*100 units) + ($500 per setup * 1 setup) + (($90/60)per…
Q: Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant:…
A: MANUFACTURING COST Manufacturing cost Include all Direct Cost (Direct Material & Direct…
Q: Assume a company produces and sells only two products—14,000 units of Product A and 6,000 units of…
A: Solution: Plantwide overhead rate = Estimated overhead costs / Estimated direct labor dollars…
Q: Joetz Corporation has gathered the following data on a proposed investment project (Ignore income…
A: The incremental net income anticipated from a potential investment opportunity, divided by the…
Q: Exercise 10-2A Amortization schedule for an installment note On January 1, 2011, Cobb Co. borrowed…
A: Time value of money :— According to this concept, value of money in present day is greater than the…
Q: The orthopods & the radiologist Suppose that there are ten orthopaedic surgeons that have their…
A: The day-to-day expenses to run a business are known as operating expenses. At the introduction…
Q: A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value…
A: Depreciation is the loss in value of an asset over a period of time. Value of an asset keeps on…
Q: Manatee Corporation wants to withdraw $500,000 (including principal) from an investment fund at the…
A: Present Value Given a certain rate of return, the present value (PV) of a future amount of money or…
Q: Your office is on the 68th floor of your building. The CEO’s office is on the 77th floor. The two of…
A: The modifications to the inventory valuation technique must be true and legitimate. If a…
Q: Variable and Absorption Costing The following data were adapted from a recent income statement of…
A: Lets understand the basics. There are two type of costing systems are generally followed by the…
Q: Using the following data, prepare the operating activities section of a statement of cash flows for…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: INSTRUCTIONS: Prepare a Statement of Changes in Partner's Capital for a partnership. Write your…
A: Statement of changes in owners equity is a statement which shows changes in owners equity during the…
Q: No. of Chairs 1040 Price Each $90
A:
Q: Assume the following information for Skysong Corp. Accounts receivable (beginning balance) Allowance…
A: Writing off Uncollectible Receivables: Eliminating an uncollectible accounts receivable from the…
Q: From the chart below, what is the correct Debt Ratio? Current Assets $1,350 Total Assets $2,500…
A: The ratio analysis helps to analyse the financial statements of the business with respect to various…
Q: Which of the following accounts has special tax advantages under certain conditions when used to…
A: Solution A Bond is a written agreement or contract between an issuer and the holder that requires…
Q: anatee Corporation bought new equipment and agreed to pay for it in five equal annual installments…
A: Solution: Cost of equipment is present value of annual equal installment discounted as prevailing…
Oki Company pays $294,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare
- Paid $19,350 cash for a new component that increased the equipment’s productivity.
- Paid $4,838 cash for minor repairs necessary to keep the equipment working well.
- Paid $12,300 cash for significant repairs to increase the useful life of the equipment from four to seven years.
|
|
Step by step
Solved in 2 steps with 1 images
- A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
- Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
- Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the life of the truck two years beyond the original estimated life. Related information is provided below. Cost of truck 65,000 Salvage value 5,000 Original estimated life 6 years The truck was purchased on January 1, 20-1. The engine was replaced on January 1, 20-6. Using straight-line depreciation, compute depreciation expense for 20-6.St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting cardiac catheterization testing in SJMCs Cath Lab. Each technician is paid a salary of 36,000 and is capable of conducting 1,000 procedures per year. The cardiac catheterization equipment is one year old and was purchased for 250,000. It is expected to last five years. The equipments capacity is 25,000 procedures over its life. Depreciation is computed on a straight-line basis, with no salvage value expected. The reading of the catheterization results is conducted by an outside physician whose fee is 120 per test. The technicians report with the outside physicians note of results is sent to the referring physician. In addition to the salaries and equipment, SJMC spends 50,000 for supplies and other costs needed to operate the equipment (assuming 5,000 procedures are conducted). When SJMC purchased the equipment, it fully expected to perform 5,000 procedures per year. In fact, during its first year of operation, 5,000 procedures were run. However, a larger hospital has established a clinic in the city and will siphon off some of SJMCs business. During the coming years, SJMC expects to run only 4,200 cath procedures yearly. SJMC has been charging 850 for the procedureenough to cover the direct costs of the procedure plus an assignment of general overhead (e.g., depreciation on the hospital building, lighting and heating, and janitorial services). At the beginning of the second year, an HMO from a neighboring community approached SJMC and offered to send its clients to SJMC for cardiac catheterization provided that the charge per procedure would be 550. The HMO estimates that it can provide about 500 patients per year. The HMO has indicated that the arrangement is temporaryfor one year only. The HMO expects to have its own testing capabilities within one year. Required: 1. Classify the resources associated with the cardiac catheterization activity into one of the following: (1) committed resources, or (2) flexible resources. 2. Calculate the activity rate for the cardiac catheterization activity. Break the activity rate into fixed and variable components. Now, classify each activity resource as relevant or irrelevant with respect to the following alternatives: (1) accept the HMO offer, or (2) reject the HMO offer. Explain your reasoning. 3. Assume that SJMC will accept the HMO offer if it reduces the hospitals operating costs. Should the HMO offer be accepted? 4. Jerold Bosserman, SJMCs hospital controller, argued against accepting the HMOs offer. Instead, he argued that the hospital should be increasing the charge per procedure rather than accepting business that doesnt even cover full costs. He also was concerned about local physician reaction if word got out that the HMO was receiving procedures for 550. Discuss the merits of Jerolds position. Include in your discussion an assessment of the price increase that would be needed if the objective is to maintain total revenues from cardiac catheterizations experienced in the first year of operation. 5. Chandra Denton, SJMCs administrator, has been informed that one of the Cath Lab technicians is leaving for an opportunity at a larger hospital. She met with the other technicians, and they agreed to increase their hours to pick up the slack so that SJMC wont need to hire another technician. By working a couple hours extra every week, each remaining technician can perform 1,050 procedures per year. They agreed to do this for an increase in salary of 2,000 per year. How does this outcome affect the analysis of the HMO offer? 6. Assuming that SJMC wants to bring in the same revenues earned in the cardiac catheterization activitys first year less the reduction in resource spending attributable to using only four technicians, how much must SJMC charge for a procedure?
- Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, two flight simulators were purchased by a space camp for 77,000 each with a salvage value of 5,000 each and estimated useful lives of eight years. On January 1, 20-2, the hydraulic system for Simulator A was replaced for 6,000 cash and an updated computer for more advanced students was installed in Simulator B for 9,000 cash. The hydraulic system is expected to extend the life of Simulator A three years beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Simulators A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each simulator for 20-2 through 20-8.