Homework Answers
1. Option (c) is correct
A change in depreciation method is handled as a prospective change from the current year through the remainder of its useful life.
2. Option (d) is correct
Gains on the sale of property, plant and equipment are the excess of the cash proceeds over the book value of the assets sold.
3. Option (d) is correct
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Question 12 (1 point) A change from the straight-line method to the sum-of-years-digits method of depreciation...
Question 1 (1 point) Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions....
Question 1 (1 point) Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. Old Equipment Cash Book Value Fair Value Received Equipment A $75,000 $80,000 $12,000 Equipment B $60,000 $56,000 $10,000 For Equipment A. Pensacola would record the new equipment at: $68.000 $63.250. $67.250. $80,000 Question 2 (1 point) P. Chang & Co. exchanged land and $9,000 cash for equipment. The book value and the fair value of the land were $106,000...
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.
During 2019 and 2020, Faulkner Manufacturing used the sum-of-the-years-digits (SYD) method of depreciation for its depreciable...
During 2019 and 2020, Faulkner Manufacturing used the sum-of-the-years-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2021, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 25% is in effect for all years. For an asset that cost $15,100 with an estimated residual value of $1100 and an estimated useful life of 10 years, the depreciation under different...
Universal Semiconductors switched from the double-declining-balance depreciation method to straight-line depreciation in 2021. The change affects...
Universal Semiconductors switched from the double-declining-balance depreciation method to straight-line depreciation in 2021. The change affects its precision equipment that was purchased at the beginning of 2019 at a cost of $50 million. The machinery has an expected useful life of ten years and an estimated residual value of $8 million. Required: Prepare the appropriate entry to record depreciation in 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Record...
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years’-digits (SYD) method of depreciation for its depreciable...
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years’-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2018, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 40% is in effect for all years. For an asset that cost $26,200 with an estimated residual value of $1,200 and an estimated useful life of 10 years, the depreciation under different...
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years’-digits (SYD) method of depreciation for its depreciable...
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years’-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2018, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 40% is in effect for all years. For an asset that cost $24,000 with an estimated residual value of $1,000 and an estimated useful life of 10 years, the depreciation under different...
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable...
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2018, Faulkner decided to change to the straight-line metho for both financial reporting and tax purposes. A tax rate of 40% is in effect for all years. For an asset that cost $20,200 with an estimated residual value of $1,200 and an estimated useful life of 10 years, the depreciation under different...
On January 2, 2016, Flake Company purchased a truck for $140,000 cash. That truck has an estimated useful life of seven years and an estimated salvage value of $12,000. The straight-line method of depreciation is being used. Required: A. Prepare a sch
On January 2, 2016, Flake Company purchased a truck for $140,000 cash. That truck has an estimated useful life of seven years and an estimated salvage value of $12,000. The straight-line method of depreciation is being used.Required: A. Prepare a schedule showing the calculation of the book value of the truck on December 31, 2019. B. Assume the truck is to be disposed of on May 1, 2020. Prepare the journal entry to record the depreciation for the four months ended April 30, 2020. C. Assuming...
one of the three is wrong Continuing from Question 2... Scenario B: Desert, Co. purchased a...
one
of the three is wrong
Continuing from Question 2... Scenario B: Desert, Co. purchased a truck for 550.000 on January 1, 2016. The truck had an estimated salvage value of $5.000 and an estimated useful life of 10 years, Desert uses the straight-line depreciation method On January 1, 2019. Desert revised the estimated salvage value to S10,000, but did not change the useful life. The accountant recorded depreciation expense using the old salvage value when calculating the $500.000 ICO....
Analyze each case and choose a letter code under each category (type and approach) to indicate the preferable accounting for each case.
jAnalyze each case and choose a letter code under each category (type and approach) to indicate the preferable accounting for each case.TypeApproachP = PolicyRWR = Retrospective with restatementE = EstimateRNR = Retrospective with no restatementAE = Accounting error P = ProspectiveUsed the instalment sales method in the past five years; an internal audit revealed that use of this method was intended to delay revenue recognition, even though the customers were ...
Question 1 (1 point) Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. Old Equipment Cash Book Value Fair Value Received Equipment A $75,000 $80,000 $12,000 Equipment B $60,000 $56,000 $10,000 For Equipment A. Pensacola would record the new equipment at: $68.000 $63.250. $67.250. $80,000 Question 2 (1 point) P. Chang & Co. exchanged land and $9,000 cash for equipment. The book value and the fair value of the land were $106,000...
During 2019 and 2020, Faulkner Manufacturing used the sum-of-the-years-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2021, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 25% is in effect for all years. For an asset that cost $15,100 with an estimated residual value of $1100 and an estimated useful life of 10 years, the depreciation under different...
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2018, Faulkner decided to change to the straight-line metho for both financial reporting and tax purposes. A tax rate of 40% is in effect for all years. For an asset that cost $20,200 with an estimated residual value of $1,200 and an estimated useful life of 10 years, the depreciation under different...
one
of the three is wrong
Continuing from Question 2... Scenario B: Desert, Co. purchased a truck for 550.000 on January 1, 2016. The truck had an estimated salvage value of $5.000 and an estimated useful life of 10 years, Desert uses the straight-line depreciation method On January 1, 2019. Desert revised the estimated salvage value to S10,000, but did not change the useful life. The accountant recorded depreciation expense using the old salvage value when calculating the $500.000 ICO....
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