2) Phosphoric Company reported capital assets, net of accumulated depreciation, on January 1, 2017, at $645,000 and $732,500 on December 31, 2017. The income statement showed depreciation of $48,300 and a $5,600 loss on sale of capital assets. Phosphoric Company acquired $213,000 of capital assets during the year. The proceeds from the sale of capital assets were: 21102 A) $125,500 B) $89,900 C) $71,600 D) $77,200 ZhuangXinyi 134739 FU ZhuangXinyi 134739

2) Phosphoric Company reported capital assets, net of accumulated depreciation, on January 1, 2017, at $645,000 and $732,500 on December 31, 2017. The income statement showed depreciation of $48,300 and a $5,600 loss on sale of capital assets. Phosphoric Company acquired $213,000 of capital assets during the year. The proceeds from the sale of capital assets were: 21102 A) $125,500 B) $89,900 C) $71,600 D) $77,200 ZhuangXinyi 134739 FU ZhuangXinyi 134739

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 32CE

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Gray 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.
On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
2011 During 2011, its first yearof operations, Eli-Wallace Distributors reported pretax accounting income of $200 million which included thefollowing amounts: 1. Income (net) from installment sales of warehouses ni 2011 of$9 milion to be reported for tax purposes ni 2012 ($5 million) and 2013 ($4 milion). .2 Depreciation si reported by the straight-line method on na asset with afour-year useful life. On the tax return, deductions for depreciation will be more than straightline depreciation the first two years but less than straight-line depreciation the next two years (S in millions): 2011 2012 2013 2014 Income Statement $ 50 50 50 50 $ 2 0 0 T a x R e t u r n •66 88 30 16 $200 Difference $(16) (38) 20 34 0 3. Estimated warranty expense that wil be deductible on the taxreturn when actually paid during the next two years. Estimated deductionsare as follows $( ni millions): 2011 2012 2013 57 : $4 (4) (3) $0 income Statement Tax Return Difference 2012 During 2012, pretax accounting income…
Qui Corporation takes a full year's depreciation expense in the year of an asset's acquisition, and no depreciation expense in the year of disposition. Data relating to one of Qui's depreciable assets at December 31, 2018 are as follows; Acquisition year- 2016; Estimated useful life- 5 years; Cost- P110,000; Residual value- P20,000; Accumulated depreciation - P72,000. Using the same depreciation method as used in 2016, 2017, and 2018, how much depreciation expense should Qui Corporation record in 2019 for this asset?
Cast Exercise Equipment, Inc. reported the following financial statements for 2024: (Click the icon to view the income statement.)(Click the icon to view the comparative balance sheet.) Read the requirements. Requirement 1. Compute the amount of Cast Exercise's acquisition of plant assets. Cast Exercise disposed of plant assets at book value. The cost and accumulated depreciation of the disposed asset was $43,400. No cash was received upon disposal. The acquisitions of plant assets amounts to Data table C Cast Exercise Equipment, Inc. Income Statement Year Ended December 31, 2024 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Net Income Depreciation Expense Other Operating Expenses Total Operating Expenses Print $ 47,000 195,000 Done $ $ - X 716,000 346,000 370,000 242,000 128,000
Please answer all the parts of the below question: At December 31, 2017, Sheffield Corporation reported the following plant assets. Land $ 3,798,000 Buildings $26,660,000 Less: Accumulated depreciation—buildings 15,097,050 11,562,950 Equipment 50,640,000 Less: Accumulated depreciation—equipment 6,330,000 44,310,000 Total plant assets $59,670,950 During 2018, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,785,200. May 1 Sold equipment that cost $759,600 when purchased on January 1, 2011. The equipment was sold for $215,220. June 1 Sold land for $2,025,600. The land cost $1,266,000. July 1 Purchased equipment for $1,392,600. Dec. 31 Retired equipment that cost $886,200 when purchased on December 31, 2008. No salvage value was received. Prepare a tabular summary that includes the plant asset accounts and…
On July 1. 2015 ABC Company, an SME, paid P755,000 cash for the net assets of XYZ Company and also incurred 12,000 directacquisition costs. The recorded assets and liabilities of XYZ are: Cash, P74,000; Inventory, P215,000; Land, P200,000; Building (net),P208,000 and liabilities of P220,000. At the same date XYZ's inventories had a fair value of P184,000, the land, P271,500 and thebuilding (net), P187,500. - Determine the amount goodwill resulting from the business combination
The 2016 financial statements for Leggett & Platt, Inc., report the following information: Year ended December 31, 2016 2015 (In millions) Depreciation expense $ 86.8 $ 83.5 Property and equipment, net 565.5 540.8 Land 37.7 40.0 Accumulated depreciation 1,165.4 1,146.5 Which of the following estimates the property and equipment's percent-used-up at December 31, 2016? A. 68.8% B. 45.4% C. 16.9% D. 42.3% E. None of the above
Machine P was acquired on April 1, 2019 in exchange for 400, 000 face amount of bonds payable selling at 94, and maturing on April 1,2029 . The accountant recorded acquisition by a debit to Machinery and a credit to Bonds Payable for 400, 000 Straight line Depreciation was recorded based on a 5-year economic life and amounted to 54,000 for nine months In the computation of depreciation , residual value of 40,000 was used. What is the initial carrying amount of the PPE? What is the carrying amount if the PPE as of December 31, 2020?
The T-accounts for Equipment and the related Accumulated Depreciation-Equipment for Pharoah Company at the end of 2017 are shown here. Equipment Beg. bal. Acquisitions 207,760 Disposals 57,134 108,035 End. bal. 258,661 Accum. Depr.-Equipment 13,245 Beg. bal. Depr. exp. Disposals 115,567 31,164 End. bal. 133,486 In addition, Pharoah Company's income statement reported a loss on the disposal of plant assets of $9,090. What amount was reported on the statement of cash flows as "cash flow from sale of equipment"? (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Cash flow from sale of equipment
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