On January 1, 2009, Warren Co. purchased a $600,000 machine with a five year useful life...
On January 1, 2009, Warren Co. purchased a $600,000 machine with a five year useful life and no salvage value. The machine was depreciated by an accelerated method for book and tax purposes. The carrying value was $240,000 on December 31, 2010. On January 1, 2011, Warren changed to the straight line method for financial reporting purposes. Warren can justify the change. Warren’s income tax rate is 30%
1. In its 2011 income statement, what amount should Warren report as the cumulative effect of this change?
2. On January 1, 2011, what amount should Warren report as deferred income tax liability as a result of the change?
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On January 1, 2009, Warren Co. purchased a $600,000 machine with
a five year useful life...
Question 14 On January 1, 2018, Crane, Inc. purchased a machine for $2360000 which will be...
Question 14 On January 1, 2018, Crane, Inc. purchased a machine for $2360000 which will be depreciated $236000 per year for financial statement reporting purposes. For income tax reporting Crane elected to expense $261000 and to use straight-line depreciation which will allow a cost recovery deduction of $211000 for 2018. Assume a present and future enacted income tax rate of 30%, what amount should be added to Crane's deferred income tax liability for this temporary difference at December 31, 2018?...
16. Depreciation Methods (LO 6.2) Ohio Box Co. purchased a bundling machine on January 1, 2009,...
16. Depreciation Methods (LO 6.2) Ohio Box Co. purchased a bundling machine on January 1, 2009, for a cost of $22,800. The machine is expected to last 5 years, or bundle 660,000 items, at which time it should have a salvage value of $3,000. A counter on the machine revealed that the machine was used at the following lev- els: 2009, 110,000 bundles; 2010, 140,000bundles; 2011, 150,000 bundles; 2012, 141,800 bundles; and 2013, 152,000 bundles. Required: (a) How much depreciation...
The Vermont Construction Company purchased a truck on January 1, 2009 at a cost of $35000. The truck has a useful life of eight years with an estimated salvage value of $6000. The straight-line method...
The Vermont Construction Company purchased a truck on January 1, 2009 at a cost of $35000. The truck has a useful life of eight years with an estimated salvage value of $6000. The straight-line method is used for book purposes, for tax purposes the track would be depreciated with the MACRS method over its five-year useful life. Determine the depreciation amount to be taken over the useful life of the having truck for both and tax purposes.
Broadway Ltd. purchased equipment on January 1, 2016, for $600,000, estimating a 6-year useful life and...
Broadway Ltd. purchased equipment on January 1, 2016, for $600,000, estimating a 6-year useful life and no residual value. In 2016 and 2017, Broadway depreciated the asset using the straight-line method. In 2018, Broadway changed to sum-of-years'-digits depreciation for this equipment. What depreciation would Broadway record for the year 2018 on this equipment? (Do not round your depreciation rate.)
Exercise 21-13 On January 1, 2017, a machine was purchased for $982,400 by Coronado Co. The...
Exercise 21-13 On January 1, 2017, a machine was purchased for $982,400 by Coronado Co. The machine is expected to have an 8-year life with no salvage value. It is to be depreciated on a straight-line basis. The machine was leased to Whispering Inc. on January 1, 2017, at an annual rental of $224,400. Other relevant information is as follows. 1. The lease term is for 3 years. 2. Coronado Co. incurred maintenance and other executory costs of $26,300 in...
On January 1, 2009, Halley Company acquired 8 percent of the outstanding common stock of Ghosh...
On January 1, 2009, Halley Company acquired 8 percent of the outstanding common stock of Ghosh Corporation for $650,000. Halley appropriately uses the cost method to account for its investment in Ghosh. Ghosh reported net income and paid dividends for the years ended 2009, 2010, and 2011, as follows: Year Net Income Dividends 2009 $100,000 $70,000 2010 $70,000 $70,000 2011 $30,000 $70,000 Based on the above information the amount of income related to its investment in Ghosh to be reported...
Exercise 21-13 On January 1, 2017, a machine was purchased for $949,600 by Blue Co. The...
Exercise 21-13 On January 1, 2017, a machine was purchased for $949,600 by Blue Co. The machine is expected to have an 8-year life with no salvage value. It is to be depreciated on a straight-line basis. The machine was leased to Kingbird Inc. on January 1, 2017, at an annual rental of $219,600. Other relevant information is as follows 1。The lease term is for 3 years. 2. Blue Co. incurred maintenance and other executory costs of $27,400 in 2017...
10. Rye Co. purchased a machine with a five-year estimated useful life and no salvage value...
10. Rye Co. purchased a machine with a five-year estimated useful life and no salvage value for $900,000 on January 1, 1992. In its income statements, what would Rye report as the depreciation expense for 1994 (year 3 of the asset) using the double-declining-balance method? Round up number on the nearest dollar and enter as a whole number. Thank you!!
On January 1, 2009, Halley Company acquired 8 percent of the outstanding common stock of Ghosh...
On January 1, 2009, Halley Company acquired 8 percent of the outstanding common stock of Ghosh Corporation for $650,000. Halley appropriately uses the cost method to account for its investment in Ghosh. Ghosh reported net income and paid dividends for the years ended 2009, 2010, and 2011, as follows: Year Net Income Dividends 2009 $100,000 $70,000 2010 $70,000 $70,000 2011 $30,000 $70,000 Based on the above information the amount of income related to its investment in Ghosh to be reported...
On January 1, Year 1, Flax Co. purchased a machine for $528,000 and depreciated it by...
On January 1, Year 1, Flax Co. purchased a machine for $528,000 and depreciated it by the straight-line method using an estimated useful life of 8 years with no salvage value. On January 1, Year 4. Flax determined that the machine had a useful life of 6 years from the date of acquisition and will have a salvage value of $48,000. An accounting change was made in Year 4 to reflect the additional data. The accumulated depreciation for this machine...
Question 14 On January 1, 2018, Crane, Inc. purchased a machine for $2360000 which will be depreciated $236000 per year for financial statement reporting purposes. For income tax reporting Crane elected to expense $261000 and to use straight-line depreciation which will allow a cost recovery deduction of $211000 for 2018. Assume a present and future enacted income tax rate of 30%, what amount should be added to Crane's deferred income tax liability for this temporary difference at December 31, 2018?...
16. Depreciation Methods (LO 6.2) Ohio Box Co. purchased a bundling machine on January 1, 2009, for a cost of $22,800. The machine is expected to last 5 years, or bundle 660,000 items, at which time it should have a salvage value of $3,000. A counter on the machine revealed that the machine was used at the following lev- els: 2009, 110,000 bundles; 2010, 140,000bundles; 2011, 150,000 bundles; 2012, 141,800 bundles; and 2013, 152,000 bundles. Required: (a) How much depreciation...
Exercise 21-13 On January 1, 2017, a machine was purchased for $982,400 by Coronado Co. The machine is expected to have an 8-year life with no salvage value. It is to be depreciated on a straight-line basis. The machine was leased to Whispering Inc. on January 1, 2017, at an annual rental of $224,400. Other relevant information is as follows. 1. The lease term is for 3 years. 2. Coronado Co. incurred maintenance and other executory costs of $26,300 in...
Exercise 21-13 On January 1, 2017, a machine was purchased for $949,600 by Blue Co. The machine is expected to have an 8-year life with no salvage value. It is to be depreciated on a straight-line basis. The machine was leased to Kingbird Inc. on January 1, 2017, at an annual rental of $219,600. Other relevant information is as follows 1。The lease term is for 3 years. 2. Blue Co. incurred maintenance and other executory costs of $27,400 in 2017...
On January 1, Year 1, Flax Co. purchased a machine for $528,000 and depreciated it by the straight-line method using an estimated useful life of 8 years with no salvage value. On January 1, Year 4. Flax determined that the machine had a useful life of 6 years from the date of acquisition and will have a salvage value of $48,000. An accounting change was made in Year 4 to reflect the additional data. The accumulated depreciation for this machine...
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