Exercise 5: ACCOUNTING FOR ERROR CORRECTION XYZ's net incomes for the past 3 years are presented below: 2015 $360,000 2016 $450,000 2017 $480,000 During the 2018 year-end audit, the following item come to your attention: XYZ bought equipment on January 1, 2015 for $294,000 with a $24,000 salvage value and a 6 year life. The company debited an expense account an credited cash on the purchase date for the entire cost of the asset. XYZ depreciates assets using the straight- line method. Required: a. Prepare 2018 journal entry to correct the error.
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- Knowledge Check 01 On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a salvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation. It has not recorded any adjustments relating to this equipment during the current year. View transaction list View journal entry worksheet Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.Reading 3M Companys Balance Sheet: Accounts Receivable The following current asset appears on the balance sheet in 3M Companys Form 10-K for the year ended December 31, 2013 (amounts in millions of dollars): Required What is the balance in 3M Companys Allowance for Doubtful Accounts at the end of 2013 and 2012? What is the net realizable value of 3M Companys accounts receivable at the end of each of these two years? What caused increases in the allowance account during 2013? What caused decreases? Explain what a net decrease in the account for the year means.Please no written by hand solutions Prepare journal entries to record the following transactions. You are required to show all calculations: 3.1 The company adopted the straight-line depreciation method. Record the 15% depreciation on the plant and equipment purchased On 1 December 2020 for R125 000. 3.2 The allowance for credit losses account has an opening balance of R4 500. The policy requires the allowance to equate 8% of the total accounts receivable. The debtors sub-ledger totaled R52 000 prior receiving 40c in the rand on an account of R3 000. The financial manager instructed the write off on the balance. Entry General Ledger Debit Credit.
- B As the recently appointed auditor for Pharoah Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Pharoah mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023 are as follows INTANGIBLE ASSETS Jan 4 5 Feb. 11 Apr 30 June 1 30 Research costs Legal costs to obtain patent Payment of seven months rent on property leased by Pha Proceeds from issue of common shares Promotional expenses related to start-up of business Development stage costs (meet all six development stage criterial Start-up costs for first six months of operations Account Titles and Explanation Research and Development Expense Intangibila Asses-Pate Rent pens Prisl Advertising Expense Income Summary Operating Expens Notes Parable Interest Expe (To correct intangible asset account) Prepare the journal entry or entries needed to correct this account Allocat…Sale of Equipment Instructions Chart of Accounts First Questions Journal Instructions Equipment was acquired at the beginning of the year at a cost of $562,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 9 years and an estimated residual value of $49,785. Chart of Accounts CHART OF ACCOUNTS Required: a. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. b. Assuming that the equipment was sold at the end of the second year for $557,317, determine the gain or loss on the sale of the equipment. c. Journalize the entry on Dec. 31 to record the sale. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a…Question 1 On January 1, 2017 Baker purchased a new stamping machine for its plant. This new piece of equipment cost $120,000 and was recorded in Baker's accounting system with a $120,000 debit to the Equipment account and a $120,000 credit to the Cash account. Baker estimates that the stamping machine will last 5 years and will have no value at the end of those 5 years. At the end of January, February, March, April, and May, Baker made the correct depreciation adjusting entries. Select the June 30, 2017 adjusting entry Baker should make for June’s depreciation: (A) Accumulated depreciation: 2,000 ________ depreciation: expense _______ 2,000 (B) depreciation expense 12,000 _______ accumulated depreciation: ______ 12,000 (C) depreciation expense 2,000 ______ accumulated depreciation ______ 2,000 (D) depreciation espense 24,000 ________ cash _______ 2,000 loss of…
- Problem 6-4: The Northrock Corporation The Northrock Corporation produced the following summary of its historical experience of write offs of Accounts Receivable (A/R) on October 31, 2021: Year A/R at Year end Uncollectible and written off in subsequent years 2018 14000 700 2019 10000 1000 2020 12000 600 2021 4000 200 Required 1. Calculate the percentage loss on Accounts Receivable for the period 2018 to 2021 by calculating total write offs over the period as a % of total A/R. Round your calculation to two decimal places. 2. Compute the balance for the Allowance for Doubtful accounts (rounded to the nearest $) on October 31, 2021 if Accounts Receivable on that date were 16000. Apply the % ending A/R method using the percentage calculated in part 1. 3. Scenario A: On October 31, 2021 the unadjusted Allowance for Doubtful Accounts was 160 credit. Prepare an adjusting entry to obtain the amount that you calculated in part 2. 4. Scenario B: On October 31, 2021 the unadjusted Allowance for…Knowledge Check 01 On October 1, equipment costing $10,700, on which $7,070 of accumulated depreciation has been recorded (through that date) was sold for $2,070 cash. Prepare the appropriate journal entry for the sale of the equipment. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)Required information A theft-avoidance locking system has a first cost of $19.000, an AOC of $16,000, and no salvage value after its 3-year life. Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset will have to be repurchased and kept for only 2 years. What would its market value, call it M. have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value Musing a spreadsheet with PMT functions and GOAL SEEK (Please upload your response/solution using the controls below.)
- Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] NewTech purchases computer equipment for $257,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $24,00O. Exercise 8-8 Double-declining-balance depreciation LO P1 Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. (Enter all amounts positive values.) Depreciation for the Period End of PeriodQuestion 330J une 2017 (the last day of the financial year Moore Retailers sold one of their office amDuters with an original cost price of R28 500. The computer was sold on credit to one of their am plovees for R7 500. Moore Retailers depreciate all their computers at 30% per year according to the reducing balances method. On 1 July 2016 the accumulated depreciation on the computer was R14 535.Required:Q.3.1 Calculate the profit or loss on the sale of the office computer (Office equipment) by (8) completing the asset disposal account in your answer book.Round all amounts to the nearest rand.Ignore VAT for this question.Q.3.2 Journalise all transactions relating to the sale of the office computer (Office equipment) in the general journal at 30 June 2017.Narrations are not required.gnore VAT for this question.Q.3.3 If Moore Retailers purchased a new computer for R32 775 (including VAT), what amount will be posted to the office equipment account in the general ledger to account for this…Current Attempt in Progress On July 1, 2014, Sheridan Enterprises sold equipment with an original cost of $79,000 for $30,600. The equipment was purchased January 1, 2011, and was depreciated using the straight-line method over a five-year useful life with a $8,400 salvage value. Prepare the journal entry to record the sale of the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Account Titles and Explanation Cash Accumulated Depreciation-Equipment Equipment gain on Debit Credit IHI