Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $487,500; land, $302,250; land improvements, $58,500; and four vehicles, $126,750. 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset’s life?
Q: A company had net income of $252,000. Depreciation expense is $26,000. During the year, accounts…
A: Cash flow from operating activities is a part of the cash flow statement and it includes transection…
Q: Pinnacle Corp. budgeted $253,730 of overhead cost for the current year. Actual overhead costs for…
A: The overhead is applied to the production on the basis of predetermined overhead rate. The…
Q: Gamba rajah manufactures picture frames. Sales for August are expected to be 10,000 units of various…
A:
Q: Selected transactions for Mr. Rahim, an interior decorator, in his first month of business, are as…
A: Assets=Liabilities+Equity An income statement is a financial report that indicates the revenue and…
Q: Jan7,2018 business purchased inventory $3550 from Caroline enterprise the money will be paid in…
A: All the transactions (known as events) are to recorded in the books of accounts. The entries are…
Q: The Statement of Financial Position of Syscoin Bhd as at 31 December are as follows: 2021 RM…
A:
Q: On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for land, Building 1, Building 2,…
A: The fixed assets if the business include land, building, etc. The costs incurred such as demolish of…
Q: Shaw Company produced 860 units. Its overhead allocation base is DLH and its standard amount per…
A: Volume variance is the formula used in comparing the actual overheads with the standard set by the…
Q: alculate the total variable cost of producing 300 units taking into consideration the learning curve…
A: The formulae for calculation of learning curve effect on labor time is Y= aXb Y= cumulative average…
Q: The Old Machine was bought one year ago and has been depreciated using the straight line basis You…
A: Machines are replaced by the companies because of declining performance due to wear and tear, which…
Q: 7. Champion Contractors completed the following transactions involving equipment. Year 1…
A: The assets may be depreciated using the straight-line method of depreciation in which the…
Q: Strawberry Fields purchased a tractor at a cost of $39,000 and sold it two years later for $25,600.…
A: Cost of Tractor = $39,000 Annual Depreciation = ($39,000 - $7,000) / 5 years = $6,400 Book value…
Q: Does the use of ghost-ticking would violate what pillar of character?
A: Making a mark that suggests you confirmed them when you didn't would be called "ghost ticking."…
Q: The desired profit margin per labor hour is $10. The material loading charge is 40% of invoice cost.…
A: Materials and labour are two important components of cost of the job. Profit margin will be added to…
Q: The following statements are true regarding dividends. Which of the following is incorrect? a)…
A: Dividend is the amount which is paid to the shareholders for investing their money into the shares.…
Q: Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments:…
A: Activity-based costing (ABC): It is a costing method in which overhead and indirect costs are…
Q: The following information relates to the defined retirement benefit plan of Integrity Company as of…
A: Accrued retirement benefit cost is one of the non current liability reported in the balance sheet of…
Q: When the market rate of interest was 12%, Halprin Corporation issued $395,000, 11%, four-year bonds…
A: A bond is a borrowing security issued by a company to raise funds from the market by making an…
Q: retirement benefit cost that is taken to other comprehensive income
A: The employee benefits is computed for the year as principals laid down in IAS19
Q: Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base…
A: Solution: Fixed overhead volume variance is computed using formula = Fixed overhead applied -…
Q: The following selected account balances appeared on the financial statements of the Washington…
A: The cash flow statement assesses a corporation's ability to handle its cash balance, or how…
Q: How do you integrate the different valuation approaches into a report? Explain it.
A: The valuation approach is a method used to determine the fair market value of a business. Most…
Q: Sedona Company set the following standard costs for one unit of its product for this year. Direct…
A: 1. Variable Overhead Cost Variance Actual Cost Standard cost for actual quantity Standard…
Q: Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single…
A: Overhead rate is calculated to determine the per cost driver rate that can be used to apply to the…
Q: Gurriel Corporation manufactures and sells laptop computers and uses standard costing. For the month…
A: Net income is the amount of income earned by an entity after deducting the expense from the revenue.…
Q: Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on…
A: Depreciation is a non cash expense which is charged for the part which has been considered to be…
Q: What is the sound value of this building?
A: Sound value is the replacement cost of property, less accrued depreciation. The replacement cost is…
Q: Make accounting entries for following perpetual inventory transaction Jan12,2018 business found…
A: Definition of Perpetual Inventory System: A Perpetual Inventory System is a method of continuously…
Q: ABC Systems is purchasing a new bar code-scanning device for its service center in Cabuyao. The…
A: Straight line method of depreciation :— In this method, annual depreciation is constant over the…
Q: On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for…
A: Land and Building are fixed assets however the treatment of both with regard to depreciation is…
Q: Luke Corp. issued $2,000,000 of 20-year, 9% callable bonds on July 1, Year 1, with interest payable…
A: From July 1 to December 31 = 6 months Interest expense has been accrued for 6 months in the month of…
Q: Based on the scenario below complete: (i) any five journal entries, & (ii) draw up T- accounts and…
A: Journal Entries represent the record of an organization’s day-to-day business-related monetary…
Q: Sarap Catering quotes a price of P910 per person for a banquet dinner. This price includes the 10%…
A: The company has a basis food price on which it charges 10% VAT and 20% service charges.
Q: What amount of unrealized gain or (loss) should be reported in the statement of comprehensive income…
A: The statement of the comprehensive income is the statement that records all the unrealized revenge,…
Q: Thomas Martin receives an hourly wage rate of $18, with time and a half for all hours worked in…
A: Introduction: The sum of an employee's paycheck that is left over after payroll deductions such as…
Q: 1 Washington Inc. just paid a dividend of $2.15 per share on its stock. The dividends are expected…
A: Current Share Price: The price at which a share of stock or any other asset was last traded is…
Q: Company: PLAY IT AGAIN SAM, INC. You are a middle manager of Play it Again Sam, Inc., a manufacturer…
A: Manufacturing overheads are one of the indirect costs being incurred in business for manufacturing…
Q: Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments:…
A: Calculation of Total factory overhead allocated per unit of Dings:- OPTION A:- $ 49.63 is the right…
Q: Calculate the balance of the Contract Asset/Liability account at the end of each year using the…
A: According to IFRS 15, Contract asset is entity's right to consideration in exchange for service that…
Q: OG Anunoby Corporation produces a special line of basketball hoops in batches. To manufacture a…
A: Since as per our policy,we are allowed to answer only first three parts of the question.I have…
Q: At December 31, Hawke Company reports the following results for its calendar year. Cash sales $…
A: Introduction: An unadjusted trial balance lists the accounts of a general ledger. It's prepared at…
Q: Siew Chin purchased her first investment property on 1 April 2021. Her first tenant moved in on 1…
A:
Q: The following information relates to Wilson, Inc.’s equipment lease with an inception date of…
A: Lease liability is the amount of obligation that has arisen from the leased asset. In a lease…
Q: nalysts pay so much attention to the Statements of Cash Flows versus the Income Statement?
A: Income statement shows the profit and loss over the period after deductions of expenses from the…
Q: The City of Portland has the following budget data for one of its Special Revenue Funds for the…
A: Answer:- Journal entry meaning:- A journal entry is done to maintain or produce records of any…
Q: Prepare a consolidated income statement for Polo Corporation and Subsidiary for the year ended…
A: Given in the question: StatementDecember 31, 2021 Particulars Polo Solo Sales…
Q: )Farmers World, a firm specializing in fertilizers, is evaluating a proposal to relax the credit…
A: Comment - We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Hello and thank you for helping me with this question. For question b (If total liquidation proceeds…
A: The settlement percentage which have to be used by the company when there is going to be liquidation…
Q: Assuming no other transactions occured, what would be the total revenues? Retained earnings as of…
A: Revenues are added to the beginning retained earnings and expenses and dividends are deducted to…
Q: In December Year 1, Lucas Corporation sold merchandise for $10,000 cash. Lucas estimated that the…
A: Cash payment of warranty claim: There will be no effect on the income statement when actual payments…
2. Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $487,500; land, $302,250; land improvements, $58,500; and four vehicles, $126,750.
4. Compared to straight-line
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 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.[The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $432,400; land, $282,000; land improvements, $37,600; and four vehicles, $188,000. Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total cost Building Land Land…[The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $810,000. The estimated market values of the purchased assets are building, $467,950; land, $257,850; land improvements, $47,750; and four vehicles, $181,450. Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Total cost of Acquisition Allocation of total cost…
- Required information [The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $810,000. The estimated market values of the purchased assets are building, $504,900; land, $271,150; land improvements, $28,050; and four vehicles, $130,900. . Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset's life? Is tax payment less under accelerated depreciation?Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $514,100; land, $329,800; land improvements, $48,500; and four vehicles, $77,600. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.1. A special manufacturing and handling device was purchased by Alfonso Manufacturing for $200,000 and is depreciated over MACRS. CFBT is estimated to amount to $800,000 for the first 2 years followed by $600,000 thereafter until the asset is retained. The effective tax rate, Te is 35% and interest is 10% per year. In present worth dollars determine the CFAT and determine if it was a viable purchase. (Note answer must be in a tabular format)
- Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $515,700, land, $305,600; land improvements, $76,400; and four vehicles, $57,300. Problem 8-1A (Algo) Part 4 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset's life? Is tax payment less under accelerated depreciation?Timberly Construction makes a lump - sum purchase of several assets on January 1 at a total cash price of $810,000. The estimated market values of the purchased assets are building, $ 487,600; land, $285,200; land improvements, $73,600; and four vehicles, $73,600. Allocate the lump - sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31, 000 salvage value. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double - declining - balance depreciation.Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $514,100; land, $329,800; land improvements, $48,500; and four vehicles, $77,600. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 salvage value.
- Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $900,000. The estimated market values of the purchased assets are building, $508,800; land, $297,600; land improvements, $28,800; and four vehicles, $124,800. Required 1. Allocate the lump-sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $27,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Analysis Component 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset’s life?Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $514,100; land, $329,800; land improvements, $48,500; and four vehicles, $77,600. Allocate the lump-sum purchase price to the separate assets purchased.Nagy Company makes a lump-sum purchase of several assets on January 1 at a total cash price of $1,800,000. The estimated market values of the purchased assets are building, $890,000; land, $427,200; land improvements, $249,200; and five trucks, $213,600. Required 1. Allocate the lump-sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 12-year life and a $120,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a 10-year life and double-declining-balance depreciation. Analysis Component 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset’s life?