On December 31, 2020, Ehrlich Inc. has a machine with a book value of $260,000. The original cost of the machine is $980,000. Depreciation is computed at $72,000 per year on a straight-line basis. On June 1, 2021, Ehrlich sold the machine for $300,000. Prepare the journal entries to update the book value of the machine and record the sale.
Q: 24
A: A taxpayer's taxable income is equal to his or her gross income less any permitted tax deductions. A…
Q: The following transactions relate to Mommy's Delivery Service, a business owned and operated by…
A: Accounting books: Accounting books are the company's financial records which are drafted during a…
Q: Mike purchases a bicycle costing $152.70. State taxes are 5% and local sales taxes are 2%. The store…
A: Introduction:- Purchase price includes Cost of Bicycle, Assembling Cost, State Tax and Local Sales…
Q: Required information [The following information applies to the questions displayed below.] A…
A: Solution:- 1)Calculation of Return on investment as follows under:- Return on investment =Net…
Q: gnment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false our... F…
A: Financial ratios helps to present the accounting data in a summarised and condensed form. Various…
Q: hich statement concerning the average settlement period for accounts payable is correct? Select…
A: The average settlement period for accounts payable means the average time taken to pay the…
Q: A company had the following purchases during its first year of operations: Purchases Sales January 6…
A: Introduction Cost of goods available for sales are those goods which are purchased or manufactured…
Q: organized on. nuary 1,. and 533,000 shares of no-par common stock with a stated value of $3 per…
A: A common share is a share that is not a preference share. In other words, it is a share that does…
Q: 2. Calculate the IRR for the following project with the following cash flows: An initial outflow of…
A: IRR is a rate at which the present value of cash inflows is equal to the present value of cash…
Q: On January 1, 2020, the merchandise inventory of Minaj, Inc. was $1,760,000. During 2020 Minaj…
A: Ending Inventory=Beginning Inventory+Purchases-Cost of Goods Sold
Q: 8. The Art Institute of Chicago received a contribution of art from a wealthy citizen of Chicago in…
A: Introduction:- Financial statements are official records of a firm, individual, or other entity's…
Q: Portia Grant is an employee who is paid monthly. For the month of January of the current year, she…
A: Net pay is the amount of compensation that remains available for distribution to an employee after…
Q: A company’s share capital consists of 2,800,000 ordinary shares of 25 pence each. During its last…
A: Dividend yield is one of the ratio which is used for calculating and analysing how much dividends…
Q: stems from the B/C ra
A: Under long life span projects will use B/C ratio. Here benefits and cost of the projects will be…
Q: Calculate his taxable income and tax liability.
A: Taxable Income is a part of the company's gross income that government subjected to the taxes. It is…
Q: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other…
A: Budgets are the estimates or forecasts which are made for future period. Production budget shows how…
Q: Gross selling price includes: I. the amount of the seller's debt assumed by the buyer. II. the fair…
A: Selling price means the rate at which the goods are sold or services are provided by the…
Q: Strick Corp. had S00,000 net income in 2022. On January 1, 2022 there were 200,000 ordinary shares…
A: Calculation of Basic Earning per share: Basic Earning per share = Earning for Equity Shareholder /…
Q: Pop Ltd and Bubble Ltd are small family-owned companies engaged in sustainably farmed vegetables.…
A: A journal entry is the first step—and an essential function—of the accounting process. Journal…
Q: Entries for uncollectible receivables, using allowance method OBJ.A Journalize the following…
A: The allowance method involves setting aside a reserve for bad debts that are expected in future. It…
Q: What is the balance of the lease after the first lease payment?
A: Annual Payments : $30,000. Lease Terms: 12 years Implicit Interest rate : 8% Present Value :…
Q: What are the payroll system's general tasks?
A: Payroll is the amount paid by business to the employees in the form of compensation for the given…
Q: Debit Credit Account Tittle Acc No Cosh in Bank Accants Receivalle Urused Laundry Supplies Prepad…
A: At the end of the accounting period, the closing entries are used to close the temporary accounts.…
Q: What is the total amount of unamortized premium discount after its fourth interest payment? or
A: Effective interest rate is the interest rate which is actually interest rate which is applied on the…
Q: Use the information in the table below to answer the questions that follow. April 1 Inventory 100…
A: Ending Inventory=Units available-Units Sold×Cost per unit
Q: Which type of attestation engagements may accountants conduct on compliance with contractual…
A: The answer for the multiple choice question and relevant explanation are presented hereunder : The…
Q: Limited liability refers to an owner's liability for which of the following? I. The amount invested…
A: Under limited liability company the shareholders liability is limited only to the extent of nominal…
Q: Grouper Dairy leases its milking equipment from Monty Finance Company under the following lease…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: elected sales and operating data for three divisions of different structural engineering firms are…
A: Solution : Return on investment is percentage return earned on average operating assets of the…
Q: Centralization of managemen Continuity of life Free transferability of owners Limited liability
A: Option C is the correct answer : Statement I,II,III and IV detailed explained below:
Q: Oriole Dairy leases its milking equipment from Waterway Finance Company under the following lease…
A: Minimum Lease Payment: It is the rental payments over the lease term. It includes amount of any…
Q: Portia Grant is an employee who is paid monthly. For the month of January of the current year, she…
A: Net pay is the amount of compensation that remains available for distribution to an employee after…
Q: When a cxompany extends credit directly to a customer for a purchase, the sale is recorded as a…
A: Sales can be in cash or credit. Cash sales amount is received immediately and credit sales amount is…
Q: curred in the purchase, resul % every June 30 and Decembe t year-end are presented belov 99
A: Transaction costs or the bond issue costs are the expenses that are incurred by the company for…
Q: Refer to Exercise 8.29. Suppose Gene determines that next year's Sales Division activities include…
A: Activity-based budgeting (ABB) is a technique for tracking, researching, and analysing activities…
Q: Documentation of an Audit Data Analytic (ADA), should be sufficient enough such that: O An…
A: Audit data analytics is an analysis of an entire population. It is not done on the sampling basis.…
Q: G. Calamia Company manufactures athletic wear for sporting goods stores and frequently sells its…
A: The accounts receivable present the sales made to customers on account and the balance due from…
Q: Which of the following would be helpful suggestions by Maria? (Sele
A: Bond issue is the issue which has been made by the company to get the funds from the public and that…
Q: Coroid Corporation used the following data to evaluate their current operating system. The company…
A: Formula: Static budget variance of variable cots = Actual Variable costs - Budgeted Variable costs
Q: Redbird Company is considering a project with an initial investment of $300,000 in new equipment…
A: Internal rate of return is a discount rate that is used in project analysis or capital budgeting…
Q: Mississippi Products Co. had the following positive cash flows during the current year: received…
A: Cash flows from operating activities: It is a section of the Statement of cash flow that explains…
Q: 18. Sam files jointly with his wife, and they have 2 children. The family's gross income is $125,…
A: Internal revenue services: It is the income administration for the United States central…
Q: The balance sheets for a company and additional information are provided below. A COMPANY Balance…
A: Profitability ratio are a class of financial metrics that are used to assess a business's ability to…
Q: The Golden Mushroom has two classes of stock authorized: 9%, $10 par preferred, and $1 par value…
A: The source of a corporation's assets, the shareholders' remaining claim on a corporation's assets…
Q: Exercise 15-13 (Algo) Lessee; operating lease; effect on financial statements [LO 15-4] At January 1…
A: The value of the lease payable and interest expenses is determined on the basis of present value of…
Q: Form W-2 on an annual basis to let the employer know ing the year. nW-2 to supply employer with…
A: The statement is explained as,
Q: El1.5 (LO 2) The following section is taken from Ohlman Ltd.'s. statement of financial position at…
A: Introduction: The amount of loan interest that has previously accrued but has not yet been paid by…
Q: What is the quantity of units available for sale for the year?
A: Units available for sale is the number of units which the company is having or had available for the…
Q: You are evaluating the balance sheet for SophieLex’s Corporation. From the balance sheet you find…
A: Introduction;- quick ratio, also known as the acid-test ratio.it indicates that company's ability to…
Q: New Berlin Corporation has annual fixed costs of $800,000, variable costs of $48 per unit, and a…
A: The contribution margin is calculated as difference between sales and variable costs. The…
On December 31, 2020, Ehrlich Inc. has a machine with a book value of $260,000. The original cost of the machine is $980,000.
On June 1, 2021, Ehrlich sold the machine for $300,000.
Prepare the
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 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?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.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.
- On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.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.
- 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 each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
- Rayya Co. purchases a machine for $105,000 on January 1, 2019. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is sold on July 1, 2023, during its fifth year of service. Prepare entries to record the partial year’s depreciation on July 1, 2023, and to record the sale under each separate situation. 1. The machine is sold for $45,500 cash. 2. The machine is sold for $25,000 cash.Rayya Company purchases a machine for $126,000 on January 1, 2021. Straight-line depreciation is taken each year for four years assuming a eight-year life and no salvage value. The machine is sold on July 1, 2025, during its fifth year of service. Prepare entries to record the partial year’s depreciation on July 1, 2025, and to record the sale under each separate situation. (1) The machine is sold for $63,000 cash. (2) The machine is sold for $52,920 cash.Rayya Company purchases a machine for $100,800 on January 1, 2021. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is sold on July 1, 2025, during its fifth year of service. Prepare entries to record the partial year's depreciation on July 1, 2025, and to record the sale under each separate situation. (1) The machine is sold for $43,200 cash. (2) The machine is sold for $34,560 cash. View transaction list Journal entry worksheet Record the depreciation expense as of July 1, 2025. Note: Enter debits before credits. Date July 01, 2025 Record entry General Journal Clear entry Debit Credit View general Journal Journal entry worksheet Journal entry worksheet < 1 2 3 Record the machine sold for $34,560 cash. Note: Enter debits before credits. Date July 01, 2025 Record entry General Journal Clear entry Debit Credit View general Journal