Homework Answers
Correct Answer: D i.e. $45,000
Acc. to historic cost principle, equipment is recorded at the cost is actually purchased. Actual cost means actual amount paid after all discount. Once purchased, its market value does not affect our cost.
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In
November, the Mathilde Corporation purchased some equipment that
had an original list price of $50,000...
(Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company purchased equipment for $50,000....
(Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company purchased equipment for $50,000. The equipment has an estimated residual value of $5,000 and an expected useful life of 10 years. Dinkle uses straight-line depreciation for its financial statements. Required: What is the difference between the company's income before taxes reported on its financial statements and the taxable income reported on its tax return in each of the first 2 years of the asset's life if the asset...
Van Beek Corporation reported the following transactions for 2019: 1. Sold equipment for $21,000. The original...
Van Beek Corporation reported the following transactions for 2019: 1. Sold equipment for $21,000. The original cost was $45,000; the book value is $18,000 2. Issued 2,000 shares of $15 par value common stock for $36 per share 3. Paid $9,000 for an Insurance policy which goes into effect in January 2020 4. Recognized $6,000 in Interest expense on Dec 31, 2019 - to be paid on April 30, 2020 5. Received $24,000 as collections from customers for 2018 sales,...
1. On June 30, 2011, Fox Enterprises sold equipment with an original cost of $495,000 for...
1. On June 30, 2011, Fox Enterprises sold equipment with an original cost of $495,000 for $200,000. The equipment was purchased January 1, 2010, and was depreciated using the straight-line method assuming a five-year useful life and $45,000 salvage value. The necessary entries for 2011 include a a. debit to Accumulated Depreciation—Equipment for $90,000. b. credit to Gain on Sale of Equipment for $160,000. c. credit to Cash for $200,000. d. debit to Depreciation Expense for $45,000. Correct answer: debit...
Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,000,000....
Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,000,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total $1,850,000 30,000 20,000 100,000 $2,000,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020. In 2021, after the 2020 financial statements were issued, the company decided to switch...
Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $1,902,000....
Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $1,902,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total $1,760,000 21,000 11,000 110,000 $1,902,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2016 and 2017. In 2018, after the 2017 financial statements were issued, the company decided to switch...
Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,036,000....
Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,036,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total $1,880,000 33,000 23,000 100,000 $2,036,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020. In 2021, after the 2020 financial statements were issued, the company decided to switch...
Crane Engineering Corporation purchased conveyor equipment with a list price of $48,700. Three independent cases that...
Crane Engineering Corporation purchased conveyor equipment with a list price of $48,700. Three independent cases that are related to the equipment follow. Assume that the equipment purchases are recorded gross. 1. Geddes paid cash for the equipment 25 days after the purchase, along with 5% GST (recoverable) and provincial sales tax of $3,409, both based on the purchase price. The vendor’s credit terms were 1/10, n/30. 2. Geddes traded in equipment with a book value of $2,400 (initial cost $41,800)...
Check my work 6. Collins Corporation purchased office equipment at the beginning of 2016 and capitalized...
Check my work 6. Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $2,080,000. This cost figure included the following expenditures: 2.14 points Purchase price Freight charges Installation charges Annual maintenance charge $1,900,000 35,000 25,000 120,000 Skipped $2,880,000 Total eBook The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2016 and 2017. Print In 2018, after the 2017...
Cullumber Engineering Corporation purchased conveyor equipment with a list price of $52,200. Thre...
Cullumber Engineering Corporation purchased conveyor equipment
with a list price of $52,200. Three independent cases that are
related to the equipment follow. Assume that the equipment
purchases are recorded gross.
1.
Geddes paid cash for the
equipment 25 days after the purchase, along with 5% GST
(recoverable) and provincial sales tax of $3,500, both based on the
purchase price. The vendor’s credit terms were 2/10, n/30.
2.
Geddes traded in equipment
with a book value of $2,100 (initial cost $40,200),...
Problem 20-11 Error correction; change in depreciation method [LO20-6] The Collins Corporation purchased office equipment at...
Problem 20-11 Error correction; change in depreciation method [LO20-6] The Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $2,225,000. This cost included the following expenditures: Purchase price $ 2,000,000 Freight charges 45,000 Installation charges 35,000 Annual maintenance charge 145,000 Total $ 2,225,000 The company estimated an ten-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2016 and 2017. In 2018, after...
(Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company purchased equipment for $50,000. The equipment has an estimated residual value of $5,000 and an expected useful life of 10 years. Dinkle uses straight-line depreciation for its financial statements. Required: What is the difference between the company's income before taxes reported on its financial statements and the taxable income reported on its tax return in each of the first 2 years of the asset's life if the asset...
Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,000,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total $1,850,000 30,000 20,000 100,000 $2,000,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020. In 2021, after the 2020 financial statements were issued, the company decided to switch...
Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $1,902,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total $1,760,000 21,000 11,000 110,000 $1,902,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2016 and 2017. In 2018, after the 2017 financial statements were issued, the company decided to switch...
Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,036,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge Total $1,880,000 33,000 23,000 100,000 $2,036,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020. In 2021, after the 2020 financial statements were issued, the company decided to switch...
Check my work 6. Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $2,080,000. This cost figure included the following expenditures: 2.14 points Purchase price Freight charges Installation charges Annual maintenance charge $1,900,000 35,000 25,000 120,000 Skipped $2,880,000 Total eBook The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2016 and 2017. Print In 2018, after the 2017...
Cullumber Engineering Corporation purchased conveyor equipment
with a list price of $52,200. Three independent cases that are
related to the equipment follow. Assume that the equipment
purchases are recorded gross.
1.
Geddes paid cash for the
equipment 25 days after the purchase, along with 5% GST
(recoverable) and provincial sales tax of $3,500, both based on the
purchase price. The vendor’s credit terms were 2/10, n/30.
2.
Geddes traded in equipment
with a book value of $2,100 (initial cost $40,200),...
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