For financial reporting, Kumas Poultry Farms has used the declining- balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,752,000. Its useful life was estimated to be six years with a $208,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight Line Declining Balance Difference 2021 $ 424 $ 917 $ 493 2022 424 611 187 2023 424 408 (16) $ 1,272 $ 1,936 $ 664 Required: 2. Prepare any 2024 journal entry related to the change. Note: Enter you answers rounded to the nearest dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Q: On January 1, a company issues bonds: Par Value: $2,000,000 Bond Term, in years: 10 Interest…
A: The bond selling price is calculated by adding the present value of the bond's face value and the…
Q: AirQual Test Corporation provides on-site air quality testing services. The company has provided the…
A: The graph displays a detailed structural diagram representing a complex organic compound or…
Q: Which of the following statements is FALSE? Some intangible assets are not required to be amortized.…
A: The false statement is: 3. Amortization expense is generally recorded with a credit to the…
Q: Problem 12-3 (Algo) Securities available-for-sale; bond investment; effective interest; financial…
A: Let's tackle each requirement step by step: Step 1: Journal Entries:a. January 1, 2024:Debit: Bonds…
Q: None
A: The entries for IGA (Lessee) from the inception of the lease through the second rental payment on…
Q: 5. Shelton, Inc., has sales of $14 million, total assets of $12 million, and total debt of $6.7…
A: Step 1: Introduction to Profit margins and return:The profit margins and returns are a set of ratios…
Q: Since 2005, Modco has a full range of groceries and general merchandise sold through 8,000 retail…
A: Introduction:Modco has demonstrated its ten-year dedication to sustainability through its operations…
Q: Tom Thompson expects to invest $17,000 at 9% and, at the end of a certain period, receive $43,867.…
A: This is a future value of a single sum problem. We know the present value ($17,000), the future…
Q: 7 Part 1 of 4 Required information [The following information applies to the questions displayed…
A: The equivalent units for materials is computed as 100% of units transferred and 100% of ending…
Q: A1 i need all solution......
A: Step 1: Formulas: Return on investment = Operating Income/Average invested assetsProfit margin =…
Q: None
A: Step 1: Meaning of ProductivityProductivity is the ratio of total output to total input. It shows…
Q: None
A: Step 1:- Step 2: Step 3: Step 4:
Q: Doc Post Date Account Title No. Ref Debit Credit month of May: 1 You invest $45,000.00 into your…
A: Let's dive deeper into each transaction with relevant examples for better understanding:May 1 -…
Q: am. 113.
A: Detailed explanation:Formula : Cost allocated to Product A = ( quantity of Product A / quantity of…
Q: The following data from the just completed year are taken from the accounting records of Mason…
A: Underapplied overhead cost's most common treatment is to close it to cost of goods sold.
Q: A8
A: Given information, Annual net cash flows = $56,100Initial investment = $336,600 Calculate the cash…
Q: None
A: Step 1: Introduction to Return on Equity:Return on Equity refers to the profit earned by company…
Q: Required information [The following information applies to the questions displayed below.] The…
A: On the basis of revenue , segment will be reported separately if it's revenue is more than or equal…
Q: The controller's staff at McNichols Lubricants is responsible for preparing quarterly performance…
A: Approach to solving the question: To effectively approach solving this question, we need to break…
Q: answer provide pleaase
A: To find the total productivity, we'll use the formula:Total Productivity (TP) =Output / Total…
Q: Accounting Subject
A: The illustration above serves as a guide for calculating the costs of ending inventory and the cost…
Q: Young Ltd issued 2 000 convertible bonds on 1 January 2015. The bonds have a three year term, and…
A: According to IFRS 9, a convertible bond is a compound financial instrument, which consists of a…
Q: ni.9
A: In non-profit accounting, net assets are classified into two categories: net assets with donor…
Q: help please answer in text form with proper workings and explanation for each and every part and…
A: 1. Allocation of Joint Costs using Sales Value at Split-off Method:To allocate joint costs using the…
Q: Mercer Asbestos Removal Company removes potentially toxic asbestos insulation from buildings. There…
A: First, we need to calculate the total cost for each activity cost pool. This is done by multiplying…
Q: Company A has convertible notes on issue. These notes are convertible to ordinary shares of the…
A: 1. Interest expense: This refers to the interest payments made by Company A to the note holders on…
Q: Provide Answer Fast With Correct Answer
A: 1. Calculate Equity to Assets Ratio: The Debt to Assets ratio is given as 45.0%. Hence, Equity to…
Q: Compute the taxable income for 2023 in each of the following independent situations:…
A: SOLUTION.To compute the taxable income for each of these individuals for 2023, we follow these…
Q: Wildhorse Company has the following two temporary differences between its income tax expense and…
A: Showing formulas:
Q: 7
A: To find the current share price of Metallica Bearings, Inc., we'll use the Dividend Growth Model…
Q: Given the following account balances before closing entries, what would be the balance for Smith,…
A: Given: Smith, Withdrawals: $27,000Service Revenue: 281,000Salaries Expense: 66,000Depreciation…
Q: Exercise 2-16A (Algo) Estimating fixed and variable costs using the high-low method LO 2-6 Walton…
A: A. Fixed CostStep 1: Calculate Variable Cost per UnitChange in Cost = $161,160 - $48,000 =…
Q: Got answer
A: Step 1: Step 2:Step 3:
Q: 1 Muskoka Tools Depot is selling snow blowers for $710.00 each. The same model blowers are being…
A: Answer to 1)Price Offered by Muskoka Tools Depot =$710.00 per snow blowerPrice offered by Dixie…
Q: [231] Use the following data: Net sales $2,708,000 Beginning total assets $713,000 Asset turnover 4…
A:
Q: Hinrich Company traded machinery with a book value of $120,000 and a fair value of $200,000. It…
A: In accounting, a transaction is said to have commercial substance if it significantly changes the…
Q: Accounting Subject step by step solutions
A: The Watson Foundation - Accounting AnalysisThis scenario presents several financial transactions for…
Q: B) The balances of selected accounts of Homework limited liability company, as at 31 December 20X1…
A: QUESTION ( A ) Total Units Sold = 24 Units in FIFO Order are 4 , 9 and 17 Total of first two = 4…
Q: During FY 2018 Bay Manufacturing had total manufacturing costs are $442,000. Their cost of goods…
A: In accounting, the Work-in-Process (WIP) Inventory represents the costs of unfinished goods in the…
Q: G me Insert Design Layout References Management Accounitng-1 Student Activity-Word 6 Mailings Review…
A: #### December 2023| Item | Amount (RO) |…
Q: want the answer
A: Since the actual overhead cost is higher than the applied, the underapplied overhead cost is closed…
Q: Select from the option list provided the most likely classification(s) of net assets, if any, that…
A: Not-for-profit entities classify their net assets into three categories: unrestricted, temporarily…
Q: #4 Question 25 of 30 View Policies -/1 E : CVS leases a building for 20 years. The lease requires…
A: The problem is asking us to calculate the present value of a lease that requires 20 annual payments…
Q: help please answer in text form with proper workings and explanation for each and every part and…
A: 1) Cost allocation of Service Departments using Step Down Method and calculating Predetermined…
Q: In its annual report, WEX Athletic Supply, Inc. includes the following five-year financial summary:…
A: 1. Trend Analysis for Net Sales:The trend analysis for net sales indicates that the company's…
Q: Current Attempt in Progress Swifty Corporation produces several products that can be sold at the…
A: From the given data, if the products which are further processed are processed further, then sales…
Q: Anton, Berty and Carol are in partnership without an agreement.However, Carol is entitled to rent…
A: First, we need to calculate the total rent payable to Carol. Carol is entitled to a rent of £2,000…
Q: The following information is available for the Savvy Company for the month of June. a. On June 30,…
A: Bank ReconciliationThis ensures that the cash balance in the company's books matches the cash…
Q: In Bramble Corp.'s income statement, they report a gross profit of $44,000 at standard and the…
A: Step 1. Calculate the total Materials VarianceMaterials Price Variance: $420 FMaterials Quantity…
Q: Notes Payable Premiums Short Term Obligations Expected to be Refinanced Unearned Revenues Choose ]…
A: Premiums: These are costs incurred by a company when it offers incentives such as items or discounts…
Step by step
Solved in 2 steps
- Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.
- At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.During 2019, White Company determined that machinery previously depreciated over a 7-year life had a total estimated useful life of only 5 years. An accounting change was made in 2019 to reflect the change in estimate. If the change had been made in 2018, accumulated depreciation at December 31, 2018, would have been 1,600,000 instead of 1,200,000. As a result of this change, the 2019 depreciation expense was 100,000 greater than it would have been if no change were made. Ignoring income tax considerations, what is the proper amount of the adjustment to Whites January 1, 2019, balance of retained earnings? a. 0 b. 100,000 c. 280,000 d. 400,000
- On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000Gray 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.Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
- For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,752,000. Its useful life was estimated to be six years with a $208,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 424 $ 917 $ 493 2022 424 611 187 2023 424 408 (16) $ 1,272 $ 1,936 $ 664For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,560,000. Its useful life was estimated to be six years with a $160,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 400 $ 853 $ 453 2022 400 569 169 2023 400 379 (21) $ 1,200 $ 1,801 $ 601 Required: 2. Prepare any 2024 journal entry related to the change. Note: Enter you answers rounded to the nearest dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,880,000. Its useful life was estimated to be four years, with a $168,000 residual value. At the beginning of 2024, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Straight Line Difference $ 762 Declining Year 2021 Balance $ 678 $ 1,440 2022 678 720 42 2023 678 360 $ 2,034 $ 2,520 (318) $ 486 Required: 2. Prepare any 2024 journal entry related to the change. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars rounded to the nearest whole number.