Question
In: Accounting
XYZ Industries purchased a new asset on March 31, 2020. The cost of the asset was...
XYZ Industries purchased a new asset on March 31, 2020. The cost of the asset was 140,000, with an estimated useful life of 8 years, and a salvage value of $15,000. XYZ uses the sum-of-the-years-digits method to depreciate the asset.
What is the book value of the asset on December 31, 2022?
|
67,709 |
||
|
72,291 |
||
|
None of the other answer choices is correct. |
||
|
118,299 |
||
|
67,083 |
||
|
65,973 |
||
|
72,917 |
||
|
21,701 |
||
|
74,027 |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Nash Corporation purchased an asset at a cost of $40,000 on March 1, 2020. The asset...
Nash Corporation purchased an asset at a cost of $40,000 on
March 1, 2020. The asset has a useful life of 8 years and a salvage
value of $3,200. For tax purposes, the MACRS class life is 5
years.
MACRS Depreciation Rates by Class of
Property
Recovery
Year
3-year
(200% DB)
5-year
(200% DB)
7-year
(200% DB)
10-year
(200% DB)
15-year
(150% DB)
20-year
(150% DB)
1
33.33
20.00
14.29
10.00
5.00
3.750
2
44.45
32.00
24.29
18.00
9.50
7.219 ...
3. EASTDALE INDUSTRIES INC. STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2020 2020 ...
3.
EASTDALE
INDUSTRIES
INC.
STATEMENT OF
INCOME
FOR THE YEAR ENDED
MARCH 31, 2020
2020
2019
Sales
revenue$1,095,000$750,000
Cost of goods
sold 635,100 435,000
Gross profit 459,900 315,000
Expenses
Depreciation
29,520
24,000
Office
supplies
2,200
1,600
Salaries and
benefits
112,850 102,500
Rent
18,000
18,000
Utilities
27,192
20,200
189,762166,300
Operating
income
270,138 148,700
Income tax
expense
59,430
32,714
Net income$
210,708$
115,986
Additional
information:
Unit sales for 2020
and 2019 were 8,760 and 6,000 units, respectively.
Required:
5a)
For each cost in
the above income statement,...
3. EASTDALE INDUSTRIES INC. STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2020 &nbs
3.
EASTDALE INDUSTRIES INC.
STATEMENT OF INCOME
FOR THE YEAR ENDED MARCH 31, 2020
2020
2019
Sales
revenue
$1,095,000
$750,000
Cost of goods
sold
635,100
435,000
Gross
profit
459,900
315,000
Expenses
Depreciation
29,520
24,000
Office supplies
2,200
1,600
Salaries and
benefits
112,850
102,500
Rent
18,000
18,000
Utilities
27,192
20,200
189,762
166,300
Operating
income
270,138
148,700
Income...
3. EASTDALE INDUSTRIES INC. STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2020 &nbs
3.
EASTDALE INDUSTRIES INC.
STATEMENT OF INCOME
FOR THE YEAR ENDED MARCH 31, 2020
2020 2019
Sales
revenue $1,095,000 $750,000
Cost of goods
sold 635,100 435,000
Gross
profit 459,900 315,000
Expenses
Depreciation 29,520 24,000
Office
supplies 2,200 1,600
Salaries and
benefits 112,850 102,500
Rent 18,000 18,000
Utilities 27,192 20,200
189,762 166,300
Operating
income 270,138 148,700
Income tax
expense 59,430 32,714
Net
income $ 210,708 $
115,986
Additional information:
Unit sales for 2020 and 2019 were 8,760 and 6,000 units,
respectively.
Required:
5 a)
For each cost in the above income statement, identify whether the
cost is fixed, variable and mixed with respect to sales volume, and...
Juan acquires a new 5-year class asset on March 14, 2020, for $200,000. This is the...
Juan acquires a new 5-year class asset on March 14, 2020, for
$200,000. This is the only asset Juan acquired during the year. He
does not elect immediate expensing under § 179. He does not claim
any available additional first-year depreciation. On July 15, 2021,
Juan sells the asset.
Click here to access depreciation table to use for this
problem.
a. Determine Juan's cost recovery for
2020.
$
b. Determine Juan's cost recovery for
2021.
$
On August 2, 2020,...
Brickell Corporation purchased a new machinery at the beginning of 2020 at a cost of $200,000....
Brickell Corporation purchased a new machinery at the beginning
of 2020 at a cost of $200,000. The machinery is expected to have a
useful life of 10 years and no residual value. The straight-line
method of depreciation is used. Adverse economic conditions develop
in 2022 that result in a significant decline in demand for
Brickell’s products. At December 31, 2022 the company develops the
following estimates related to the machinery:
• Expected future cash flows: $150,000
• PV of expected...
On March 1, 2020, the XYZ Company acquired 40% of the voting stock of KLM Company...
On March 1, 2020, the XYZ Company acquired 40% of the voting
stock of KLM Company for 6 million. The net worth of KLM book value
is 10 million. The fair market value of the KLM assets and
liabilities are equal except for a building with book value of 3
million has a fair value of 5 million.
KLM reported net income of 2 million and made dividend
distributions of 1 million during the year ending 12/31/2020
Assuming XYZ is...
On May 31, 2018, Javier Sanchez purchased and placed in service a new 7-year class asset...
On May 31, 2018, Javier Sanchez purchased and placed in service
a new 7-year class asset costing $489,200 for use in his
landscaping business, which he operates as a single member LLC
(Sanchez Landscaping LLC).
Rather than using bonus depreciation, Javier would like to use §
179 to expense $200,000 of this asset and then use regular MACRS to
cost recover the remaining cost. During 2018, his business
generated a net income of $587,040 before any § 179 immediate
expense...
Sunrise Development Industries purchased a depreciable asset for $50 000 on 1 July 2016. The asset...
Sunrise Development Industries purchased a depreciable asset for
$50 000 on 1 July 2016. The asset has a five-year useful life and a
$10 000 estimated residual value. The company will use the
straight-line method of depreciation for book purposes. However,
Sunrise will use the reducing-balance method for tax purposes.
Assume a tax rate of 30 per cent.
Prepare depreciation schedules using the straight-line and
reducing-balance methods (at 1.5 times the straight-line rate) of
depreciation for the useful life of...
Hazel purchased a new business asset (five-year property) on November 30, 2017, at a cost of...
Hazel purchased a new business asset (five-year property) on
November 30, 2017, at a cost of $100,000. This was the only asset
acquired by Hazel during 2017. On January 7, 2018, Hazel place the
asset in service. She did not elect to expense any of the asset
cost under 179, nor did she elect straight-line cost recovery. On
October 25, 2019, Hazel sold the asset. Determine the cost recovery
for 2017, 2018 and 2019.
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