Hunt Company purchased factory equipment with an invoice price of $90,000. Other costs incurred were freight costs, $1,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 8-year useful service life.Compute the acquisition cost of the equipment.1) Acquisition cost of the equipment$_______________ 2) If the double-declining-balance method of depreciation was used, the constant percentage applied to a declining book value would be ____________% 3) Exercise 178 a-bPrepare the necessary journal entries for the following transactions:On September 1, Draper Company borrowed $180,000 from Dixion County Bank on a 6-month, 8% note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)Account Titles and Explanation |Debit |Credit_______________________________ _______ ______________________________________ _______ ________4) On December 31, Draper Company accrued interest (assume adjusting entries are only made at the end of the year). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)Account Titles and Explanation |Debit |Credit__________________________________ ______ _________________________________________ ______ _______5) Exercise 201 a-bIn March, gross earnings of Perlman Company totaled $250,000. All earnings are subject to 7.65% FICA taxes, 5.4% state unemployment taxes, and 0.8% federal unemployment taxes.Compute the employer’s payroll tax expense.6) Payroll tax expense $___________7) Prepare the entry to record payroll taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)Account Titles and Explanation |Debit |Credit__________________________________ _________ __________________________________________ ___________ ____________________________________________ __________ __________
Which of the following statements does not properly state a basic principle for reporting an
Question Which of the following statements does not properly state a basic principle for reporting an accounting change? a. retrospectively adjust for a change in reporting entityb. retrospectively apply a change in accounting principlec. retrospectively apply a change in accounting estimated. prospectively account for a change in accounting estimate
Payback Period and NPV of Alternative Automobile Purchase
Question Payback Period and NPV of Alternative Automobile Purchase
Wendy Li decided to purchase a new Honda Civic. Being concerned about environmental issues she is leaning toward a Honda Civic Hybrid rather than the completely gasoline-powered LX model. Nevertheless, she wants to determine if there is an economic justification for purchasing the Hybrid, which costs $4,950 more than the LX. Based on a mix of city and highway driving she predicts that the average gas mileage of each car is 40 MPG for the Hybrid and 30 MPG for the LX. Wendy also anticipates she will drive an average of 12,000 miles per year and that gasoline will cost an average of $2.75 per gallon over the next four years. She also plans to replace whichever car she purchases at the end of four years when the resale values of the Hybrid and the LX are predicted to be $12,000 and $8,500 respectively.Requireda. Determine the payback period of the incremental investment associated with purchasing the Hybrid. Answer yearsb. Determine the net present value of the incremental investment associated with purchasing the Hybrid at a ten percent time value of money. Use a negative sign with your answer, if appropriate. Round answer to the nearest whole number. $Answer
The Williams Supply Company sells for $40
Question Cash Budget
The Williams Supply Company sells for $40 one product that it purchases for $25. Budgeted sales in total dollars for next year are $1,400,000. The sales information needed for preparing the July budget follows:MonthSales RevenueMay$ 34,000June48,000July56,000August64,000 Account balances at July 1 include these:Cash$ 24,000Merchandise inventory17,500Accounts receivable (sales)25,760Accounts payable (purchases)16,250 The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $210,000 , of which one-half is fixed expense (inclusive of a $21,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the nearest whole number.)(a) make a schedule of estimated cash collections for July.WilliamsSupply CompanySchedule of Cash CollectionsFor the Month of JulyCurrent month’s salesAnswerPrevious month’s salesAnswerTwo months’ prior salesAnswerTotal cash collectionsAnswer (b) make a schedule of estimated July cash payments for purchases. For this, perform your calculation using units rounding up to the nearest whole unit. Then convert to dollars for your answer. WilliamsSupply CompanySchedule of Cash Payments for PurchasesFor the Month of JulyCurrent month’s purchasesAnswerBeginning accounts payableAnswerTotal cash paymentsAnswer (c) make a schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.WilliamsSupply CompanySchedule of Selling and Administrative Expenses and Cash DisbursementsFor the Month of JulyTotalCashSelling and administrative expenses:FixedAnswerCash paymentAnswerVariableAnswerAnswerTotal expenses and cash disbursementsAnswerAnswer (d) malke a cash budget in summary form for July.Do not use negative signs with any answers below.WilliamsSupply CompanyCash BudgetFor the Month of JulyCash receiptsAnswerCash disbursements:MerchandiseAnswerSelling and administrativeAnswerAnswerExcess receipts (disbursements)Answer
The below information relates to Good Day Ltd for the year ended 30 June, 2019:
Question The below information relates to Good Day Ltd for the year ended 30 June, 2019: Accounting Profit Before Income Tax 400,000(After all revenue and expenses listed below have been included) Long-service leave expense 20,000Depreciation of Plant 40,000Bad debts expense 8,000Revenue received in advance for service in August 2019 12,000Interest income (not yet received) 3,000 Additional Information:The plant was purchased at the beginning on 1 July, 2018 at the cost of $200 000. The company estimates the asset’s useful life of 5 years using the straight line method. The Australian Tax Office (ATO) allows a depreciation rate of 30% straight line on cost. Long-service leave actually paid during the year was $3,000.Bad debts of $4 000 were written off in this year.A corporate tax rate of 30% applies. Required:Determine the current tax liability of Good Day Ltd for the year ended 30 June 2019 and prepare the journal entry for the current tax liability.
On January 1, 2017, Burke Aerospace signs an 8-year, non-cancelable
Question On January 1, 2017, Burke Aerospace signs an 8-year, non-cancelable lease agreement to lease a hanger from Aero Castle Company. The following information pertains to this lease agreement. · The agreement requires equal rental payments of $162,347 beginning on January 1, 2017. · The fair value of the building on January 1, 2017 is $1,100,000.· The building has an estimated economic life of 10 years, a guaranteed residual value of $50,000, and an expected residual value of $35,000. · Burke depreciates similar buildings on the straight-line method. · The lease is nonrenewable. · At the termination of the lease, the building reverts to the lessor and there is no purchase option. · Burke’s incremental borrowing rate is 6% per year. The lessor’s implicit rate is not known by Burke.Required: a) Concisely explain what type of lease this is to Burke and why it is that type of lease.b) Calculate the amount of any lease liability and asset for Burke as of the lease inception date.c) Prepare the journal entries for Burke for all of 2017. Burke’s fiscal year began January 1 and ended December 31. Every entry must have an explanation and as part of it calculations must be shown. d) Indicate what Burke must report on the income statement related to this lease for the year ended December 31, 2017.
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