1. Moneo Co. purchased equipment that was installed and ready for use at the beginning of January 2025 for a total cost of $1,250,000. The salvage value was estimated at $200,000. The machinery is depreciated over five years using the straight-line method. At December 31, 2027, the undiscounted expected future net cash flows were $500,000 and the discounted expected net cash flows were $450,000. Instructions 1. Prepare the journal entry to record the impairment loss (if any) at12/31/2027. 2. Assume that Moneo did not use the asset in 2028 and listed it for sale. At 12/31/28, the ass had a fair value of $500,000 and a disposal cost of $10,000. Prepare any journal entry need at that date with regard to the asset.
Q: answer is not one of my choices, can you help me do it again? These are the answers I was given…
A: First In, First Out (FIFO) is an inventory valuation method makes an assumption that the inventory…
Q: ing partner of a certain partnership. She receives a bonus as part of her profit and loss…
A: Partnership - A partnership is a contract wherein parties, also referred to as business partners,…
Q: a. What amount of ordinary Income and separately stated items are allocated to them for year 1 based…
A: Ordinary earnings is any form of earnings that’s taxable at regular rates. Examples of regular…
Q: What amount of research and development costs should be charged to Bennet’s 2021 statement of profit…
A: The amount of research and development costs charged to Hall's 2013 income statement should be…
Q: At the beginning of July, CD City has a balance in inventory of $3,250. The following transactions…
A: The process of recording transactions in a business's many books of accounts, such as its cash book,…
Q: Shane is a trader dealing in paints. From the following transactions, pass journal entries for the…
A: JOURNAL ENTRIES Journal Entry is the First stage of Process of Accounting. Journal is the Process…
Q: During 2022, MinMin Co. purchased a second-hand machine at a price of P3,200,000. A cash payment of…
A: An expense that raises the cost base of a fixed asset on a company's balance sheet is known as a…
Q: uired 1 Required 2 plete the following table showing the relation between sales and return on…
A: Lets understand the basics. Contribution margin is a margin generated on the sales. It is a sales…
Q: We-Got-It Office Supply has a beginning inventory of 12 paper cutters at a cost of $37 each. During…
A: Computation of ending inventory using specific identification method Cost per unit [A] ending…
Q: Laura, manager of Swifty Company, is using a variable costing system to evaluate the company's…
A: Variable manufacturing cost per unit =$22 Fixed MOH per unit = $43,200 / 7,200 =$6 Total…
Q: Upon receipt of the budget, the team manager, Damion Brownie, has now informed you that, in keeping…
A: A budget is a statement of expected or estimated revenues and expenses for a future period based on…
Q: 1. Skysong Company's unadjusted trial balance at December 31, 2025, included the following accounts.…
A: The accounts receivable means the amount received by the company in the near future. The number of…
Q: Calculate the net working capital of the company Using the following information.
A: Net working capital is the difference between current assets and current liabilities. If a company…
Q: An investor in the 22 percent tax bracket is trying to decide which of two bonds to select: one is a…
A: In general, the Cashflow series are the before-tax return on which tax has been deducted for…
Q: November 11, 2022On January 1, 2011, Rand Corp. issued shares of its common stock to acquire all of…
A: Workings: Amortization Expenses for Building $6,000 ($60,000 / 10 Years) Amortization…
Q: Property taxes are considered: a. imposed tax revenues. b. derived tax revenues. c. voluntary…
A: Lets understand all the options. Imposed tax revenue is a revenue generated by the government based…
Q: The following information was taken from the financial statements of Zeil Inc. for December 31 of…
A: The ratio analysis is done to analyse the different financial statements of the business. The…
Q: The following estimates relate to the Miranda Processing Company for the year ended December 31,…
A: Our attempt to come up with the best 'guess' possible regarding the amount of overhead that should…
Q: 2.2. The following are sales, cost of sales, and inventory data of client, figures are in $…
A: Material misstatement is mistake or fraud which auditor finds material in nature. The value of…
Q: EcoSacks manufactures cloth shopping bags. The controller is preparing a budget for the coming year…
A: Production Budget :— This budget is prepared to estimate the number of units produced during the…
Q: Curri, Incorporated sold its 5% bonds with a maturity value of $1,000,000 on August 1, 2021.…
A: Bonds are the instruments representing money borrowed from the investors (bondholders) which carry a…
Q: Allison bought a Blu-ray DVD player from the store for $275 that came with a one-year warranty. At…
A: A warranty is a written statement and promisory note made to buyer for the purchase of goods.If the…
Q: Aerial Company acquired land containing natural resources on January 1 that it planned to extract…
A: The method of depletion is a kind of accrual accounting that is used for the purpose of allocating…
Q: Rob is a quality inspector on the assembly line of a manufacturing company. He is paid P16 per hour…
A:
Q: charge all his personal expenses to his business. He said that he owns the company anyway.
A: Expenses and revenues are charged in the income statement of the comapny. The expenses and revenues…
Q: Goring Dairy leases its milking equipment from King Finance Company under the following lease terms.…
A: Lease- A lease is a agreement outlining the terms below which one party agrees to rent an asset. In…
Q: how do the advanced technologies have impact on the accounting function of a company?
A: there is the use of technology in every field and accounting is also not a very apart from this in…
Q: Given that Blackboard Clinic has fixed costs of $1,000,000 and a total cost forecast of $1,700,000…
A: VARIABLE COST Variable Cost are Fixed at Per Unit Basis. Variable costs are costs that change…
Q: Butrico Manufacturing Corporation uses a standard cost system, records materials price variances…
A: Note: As per our guidelines, we will solve the first three subparts for you. 1. Direct…
Q: White Lion Homebuilders is considering investing in a one-year project that new common stock and…
A: Rate of return represents the percentage of earnings the investor would get by investing money in a…
Q: On January 3, 2019, Sheppard Corporation purchased 15% of Meredith Corporation's common stock for…
A: The common stock is a type of the security that represents the ownership of the company. The common…
Q: BE8-5 On March 20, Pugh's petty cash fund of $100 is replenished when the fund contains $11 in cash…
A: The journal makes sure that all entries are logged, regardless of the size of the entity. The…
Q: Prepare A schedule of expected cash disbursements for accounts payable for each of the months…
A: SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR ACCOUNT PAYABLE Schedule of expected cash payments…
Q: Required: a. & b. Compute ROI, using net book value and gross book value. Note: Enter your answers…
A: Return on Investment (ROI) represent the Company's Earnings as a percentage of its Total Assets. It…
Q: 15. On January 1, 20x5, Paz acquired 80% of Shey outstanding ordinary shares for P950,000. Paz uses…
A: Consolidated assets mean assets of holding and subsidiary companies on balance sheet date. It…
Q: Required:- The business needs to have a sense of its future cash inflows and outflows for the…
A: The cash budget is the estimation of total receipts and payments for a specific period. It can be…
Q: My first question was incomplete. The payroll register was not completely filled. Journalize the…
A: Payroll entries are recorded to reflect the payment made to employees and the salary deducted from…
Q: Varsity Supplies & Things is a family-owned store. The business is now approaching the end of…
A: The cash budget is the estimation of total receipt and payment during the given period. It can be…
Q: MULTIPLE CHOICE-PROBLEMS The following costs relate to Antonio Industries for the last quarter:…
A: "Since you have posted a question with multiple sub parts, we will solve first three sub parts for…
Q: On July 1, 2021, GIl Inc. received 103,288 for each 100,000 face value bonds, 12% bonds, a price…
A: One of the source used by the business organizations in order to meet their financial requirements…
Q: How does a company that manufactures hundreds of products determine each product's profitability?
A: Profit refers to the amount of money received from sales that is left after all expenditures,…
Q: Land acquired for resale or disposal is more appropriately classified as inventory rather than…
A: Assets of a durable type that are utilized by businesses include property, plant, and equipment.…
Q: On January 1, 20X1, Shaw purchased 100% of the stock of Poe in a transaction that was properly…
A:
Q: (a) Determine the total costs that each operating segment would be accountable for if support costs…
A: Meaning of cost allocationAllocating the cost of support department into operating department…
Q: The trial balance of Building Blocks Child Care does not balance. Prepare the corrected trial…
A: Trial balance is a financial report showing the closing balance of all accounts. Every transaction…
Q: The budgeted overheads and cost driver volumes of XYZ are as follows. Cost pool Budgeted…
A: Activity based costing represents the allocation of cost on the basis of the activities happened in…
Q: 3-Dec Mrs. Veena started business by introducing cash R$5000 and Rs 500000 as transfer from her…
A: In order to record a business transaction in the accounting records of the company, a journal entry…
Q: Varsity Supplies & Things is a family-owned store. The business is now approaching the end of the…
A: A cash budget is an estimate of a corporation's cash flows for a given time span. A cash budget is…
Q: 1) How to classify these expenses in an Income statement? What goes into an IS and what does not?…
A: 1. Items of Income statement: The income statement presents revenue, expenses, and net income. The…
Q: You have been asked to develop a pro forma statement of cash flow for the coming year for Autumn…
A: An operating statement of cash flow is one of the primary financial statements prepared for showing…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.Estimate the average total estimated useful life of depreciable property, plant, and equipment. Starbucks reports 580.6 million of depreciation and amortization in the statement of cash flows, of which 4.5 million relates to amortization of limited-life intangible assets. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain.Kchat purchased equipment that was installed and ready for use at the beginning of January 2025 for a total cost of $1,275,000. The salvage value was estimated at $219,000. The machinery is depreciated over five years using the straight-line method. At December 31, 2027, the undiscounted expected future net cash flows were $505,000 and the discounted expected net cash flows were $454,500 Assume that Blossom did not use the asset in 2028 and listed it for sale. At 12/31/28, the asset had a fair value of $505,000 and a disposal cost of $13,000. Prepare any journal entry needed at that date with regard to the asset.
- In 2018, Batman Company ( an IFRS reporter) acquired equipment at a cost of $620,000. The balance of accumulated depreciation is $340,000. The sum of the discounted future cash flows expected from the use of this asset is $290,000 and the asset's current fair value is $250,000 before considering costs of disposal of $5,000. What is the recoverable amount?On January 1, 2014, Barbed Company purchased an equipment for P900,000, with an estimated useful life of 8 years. Straight-line method of depreciation is to be used with no salvage value. On January 1, 2017, the equipment was tested for impairment. The estimated selling price of the equipment is P550,000 and the estimated cost to sell is P30,000. The asset is expected to provide annual net cash inflows of P145,000 during the remaining useful life of the equipment and estimated a residual value of P35,000 at the end of its useful life. The appropriate pre-tax discount rate that reflects current market assessments of the time value of money is 12%. 26) How much is the recoverable value of the equipment on January 1, 2017? A 520,000 C. 550,000. B. 542,570 D. 562,500 27) How much is the impairment loss to be recognized on January 1, 2017?(AICPA) . Meriorie, Inc. acquired a machine for P400,000 on August 31, 200 The machine has a five-year life, a P50,000 residual value, and was depreciated using the straight-line method. On May 31, 20x3, a test for recoverability reveals that the present value of expected net future cash inflows related to the continued use and eventual disposal of the machine total P150,000. The machine's fair value less costs of disposal on May 31, 20x3, is P135,000, with no residual value. Assuming a loss on impairment is recognized on May 31, 20x3, what is Marjorie's depreciation expense for June 20x3?
- On January 1, 2014, Barbed Company purchased an equipment for P900,000, with an estimated useful life of 8 years. Straight-line method of depreciation is to be used with no salvage value. On January 1, 2017, the equipment was tested for impairment. The estimated selling price of the equipment is P550,000 and the estimated cost to sell is P30,000. The asset is expected to provide annual net cash inflows of P145,000 during the remaining useful life of the equipment and estimated a residual value of P35,000 at the end of its useful life. The appropriate pre-tax discount rate that reflects current market assessments of the time value of money is 12%. 26) How much is the recoverable value of the equipment on January 1, 2017? A 520,000 C. 550,000 . B. 542,570 D. 562,500 27) How much is the impairment loss to be recognized on January 1, 2017? A. 12,500 C. 19,930 B. 42,500 D. 0 28) How much is the depreciation expense for the year 2017? A. 108,514 C. 103,000 B. 101,514 D. 112,500Brazo De Mercedes Company purchased an equipment on January 2, 2018 for P2,000,000. The equipment is depreciated using straight line method, has an estimated useful life of 8 years and no salvage value. On December 31, 2019, the equipment has a fair value of P1,300,000 and estimated cost of disposal of P20,000. A net cash flow of P310,000 per year is expected from the asset from its continuing use. Applicable discount rate is 10%. (Round of PV Factor to 4 decimal places.) On December 31, 2021, the equipment has a fair value of P1,100,000 and estimated cost of disposal of P50,000. How much is the gain on impairment reversal for 2021? P0 P50,000 P149,905 P99,905Union Industries purchased equipment for $86,000 on January 1st, 2022. The useful life of the equipment is estimated to be four years or 10,000 hours. If the estimated salvage value is $7,000, what will be the yearly depreciation expense under the straight-line method? $19,750 $0 $23,250 $21,500
- Presented below is information related to equipment owned by Crane Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value (a) $9,090,000 1,010,000 Crane intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $20,250. As of December 31, 2025, the equipment has a remaining useful life of 4 years. 7,070,000 4,848,000 Dec. 31 Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2025. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Date Account Titles and Explanation Debit CreditPresented below is information related to equipment owned by Oriole Company at December 31, 2025. Cost Accumulated depreciation to date. Expected future net cash flows Fair value (a) $10,000,000 (b) 1,200,000 Oriole intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $24,000. As of December 31, 2025, the equipment has a remaining useful life of 5 years 8.400.000 5,760,000 Prepare the journal entry of any to record depreciation expense for 2026 ( no entry is required, select "No entry for the account titles and enter O for the amounts Credit account titles are automatically indented we entered. Do not indent manually List debit entry before credit entry) Account Titles and Explanation Debit CreditAt 30 June 2020, White Ltd reported the following cash-generating unit, with the carrying amount totaling $530,000: Land 200,000 Equipment 600,000 Accumulated depreciation - Equipment (300,000) Goodwill 30,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2020, the recoverable amount of the cash-generating unit was $480,000. For the period ending 30 June 2021, the depreciation charge on the equipment was $38,000. If the equipment had not been impaired the charge would have been $41,000. At 30 June 2021, the recoverable amount of the unit was calculated to be $15,000 greater than the carrying amount of the assets of the unit. As a result, White Ltd recognized a reversal of the previous year’s impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2020 and impairment reversal at 30 June 2021. And you are required to show all workings for allocation of impairment (and reversa