The following selected events occurred for Orwell Company during the first quarter of 2019: Jan. 11 A motor breaks on a machine and is replaced for $2,400. This replacement was expected when the machine was purchased. Feb. 15 A machine breaks down unexpectedly and requires repairs of $700. Mar. 10 An accident damages some equipment. Repairs cost $2,000. mar 19 A motor breaks on a machine and is replaced for $900. The new motor is of an improved design that increases the capacity of the machine.
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The following selected events occurred for Orwell Company during the first quarter of 2019:
Jan. 11 A motor breaks on a machine and is replaced for $2,400. This replacement was expected when the machine was purchased.
Feb. 15 A machine breaks down unexpectedly and requires repairs of $700.
Mar. 10 An accident damages some equipment. Repairs cost $2,000.
mar 19 A motor breaks on a machine and is replaced for $900. The new motor is of an improved design that increases the capacity of the machine.
march 27 Office layout is rearranged at a cost of $700. At the same time, the walls are repainted for $500.
Required: 1. Prepare
2. Would any of your answers change if the company used IFRS? If so, how?
Journal entry is a primary entry that records the financial transactions initially.
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- The following selected events occurred for Orwell Company during the first quarter of 2016: Jan. 11 A motor breaks on a machine and is replaced for $2,400. This replacement was expected when the machine was purchased. Feb. 15 A machine breaks down unexpectedly and requires repairs of $700. Mar. 10 An accident damages some equipment. Repairs cost $2,000. 19 A motor breaks on a machine and is replaced for $900. The new motor is of an improved design that increases the capacity of the machine. 27 Office layout is rearranged at a cost of $700. At the same time, the walls are repainted for $500. Required: 1. Prepare journal entries for the preceding transactions. 2. Would any of your answers change if the company used IFRS? If so, how?On May 1, a commercial baking company purchased a commercial oven on account. The oven costs $40,000, has a life of 5 years, and has no salvage value. The company ordinally uses straight-line depreciation. The company recorded the following transaction. Debit equipment maintenance expense $40,000; credit Accounts payable $40,000. The company paid for the oven in June. If the company does not correct this error before December 31, which impact will the error have on the balance sheet? Property. plant, and equipment (PP&E) will be understated Operating expenses will be understated Property. plant and equipment (PP&E) will be overstated Accumulated depreciation will be overstated A hospital accidentally invoiced a patient twice for the same treatment, which cost $800. The patient received two invoices and paid them both. The hospital recorded $1,600 of revenue and $1,600 of payments. If the books have not been closed for this period, which entry would correct the hospital's error? • Debit…Langley Corporation replaced an HVAC system in one of its warehouses in July, 2021, at a cost of $430,000. The accountant recording the purchase charged it to repairs and maintenance expense. The error was discovered late in 2022 while reconciling depreciation expense for 2022. The system should last about 7 years with no salvage value. What entry should be made before the 2022 books are closed if the company uses straight-line depreciation? (Round intermediate calculations to the nearest cent and your final answer to the nearest dollar.) Group of answer choices Warehouse 430,000 Depreciation Expense—Warehouse 61,429 Retained Earnings 491,429 Warehouse 430,000 Depreciation Expense (2022)—Warehouse 61,429 Accumulated Depreciation—Warehouse92,144 Retained Earnings—Prior Period Adjustment 399,285 Warehouse 430,000 Accumulated Depreciation -Warehouse 61,429 Retained Earnings—Prior Period Adjustment 368,571 Retained…
- On January 1, 2019, Wildhorse Company purchased and installed a telephone system at a cost of $31,000. The equipment was expected to last five years with a salvage value of $4,500. On January 1, 2020, more telephone equipment was purchased to tie-in with the current system for $16,000. The new equipment is expected to have a useful life of four years and no salvage value. Through an error, the new equipment was debited to Utilities Expense. Wildhorse Company uses the straight-line method of depreciation. Prepare a schedule showing the effects of the error on Utilities Expense, Depreciation Expense, and Net Income for each year and in total beginning in 2020 through the useful life of the new equipment. (If an amount is understated then enter with negative sign preceding the number e.g. -45 or parentheses e.g. (45). If answer is zero please enter O, do not leave any fields blank.) Year 2020 2021 2022 2023 Total Utilities Expense Overstated (Understated) LA $ Depreciation Expense…There was an explosion at the plant on December 23, 2021 with damages estimated at $1,385,000. The company has insurance to cover such incidents totaling $5,000,000 if the incident was an accident and $1,000,000 if it was due to company error. The incident was investigated and the explosion found to be due to a faulty gas tank that was last serviced on July 15, 2021. The company policy was to service every 6 months however industry standards was generally 3 months. Management was advised by legal counsel that there was a high probability the company would be held responsible for the damages. Employees were not injured during the incident however the employees’ union has indicated that there are discussions underway relating to filing a $3,000,000 claim for unsafe working conditions. Prepare the journal entries necessary to record the transactions above using appropriate dates. ii.Prepare the adjusting entries necessary at December 31, 2021 in order to properly report interest expense…On January 2, 2018, Lapar Corporation purchased a machine for $50,000. Lapar paid shipping expenses of $500, as well as installation costs of $1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of $3,000. On January 1, 2019, Lapar made additions costing $3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2019? 2. Assume Lapar determines the machine has three significant components as shown below. Component Amount Service Life Salvage Value $25,000 10 years $3,000 15,000 5 years 11,700 3 years If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded? A B с 0 0
- Woods, Inc. purchased a new engine for a long-distance truck in January, 2021. The engine cost $240,000 and should give the truck an additional 500,000 miles of life. Inadvertently, the engine was charged to truck repairs expense. The error was found in December, 2022. The company records depreciation based on miles driven with no salvage value. Miles driven in 2021 were 80,000 and 70,000 in 2022. Which one of the following entries properly corrects all the errors through December 31, 2022? (Ignore income taxes.) (Round any intermediate calculations and your final answers to the nearest dollar.) Group of answer choices Truck 240,000 Depreciation Expense--Truck (2022) 33,600 Accumulated Depreciation -Truck 72,000 Retained Earnings 201,600 Retained Earnings 201,600 Depreciation Expense (2021) -Truck 38,400 Truck 240,000 Truck 240,000 Accumulated Depreciation - Truck33,600 Retained Earnings 206,400 Truck 240,000 …On October 1, 2019, Jefferson Consulting purchased new computers for $13,820. The computers are expected to last 3 years and will have an estimated residual value of $500. Jefferson Consulting has a December 31 year end. Required Prepare the table below showing the yearly depreciation, accumulated depreciation, and net book value of the equipment. Do not enter dollar signs or commas in the input boxes. Round your answers to the nearest whole number. Year Original Cost of Equipment Depreciation Expense Accumulated Depreciation Net Book Value 2019 Answer Answer Answer Answer 2020 Answer Answer Answer Answer 2021 Answer Answer Answer Answer 2022 Answer Answer Answer AnswerChahal Company’s fiscal year-end is December 31. The company purchased a machine costing $129,000 on April 1, 2022. The machine is expected to be obsolete after five years (60 months), and thereafter no longer useful to the company. The estimated salvage value is $6,000. The company’s depreciation policy is to record depreciation for the portion of the year that the asset is in service. Compute depreciation expense for 2022 under the straight‑line depreciation method. (Round your answer to the nearest whole number. Do not include a $ sign in your answer.)
- Presented below are selected transactions at Sarasota Company for 2020. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2010. The machine cost $60,300 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2017. The computer cost $45,000. It had a useful life of 5 years with no salvage value. The computer was sold for $15,100. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2016. The truck cost $41,940. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Sarasota Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2019.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order…Presented below are selected transactions at Marigold Corp. for 2020. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2010. The machine cost $64,600 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2017. The computer cost $37,800. It had a useful life of 5 years with no salvage value. The computer was sold for $13,600. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2016. The truck cost $40,440. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Marigold Corp. uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2019.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order…Presented below are selected transactions at Splish Brothers Inc. for 2020. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2010. The machine cost $63,800 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2017. The computer cost $37,800. It had a useful life of 5 years with no salvage value. The computer was sold for $15,100. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2016. The truck cost $40,620. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Splish Brothers Inc. uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2019.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the…