Question
In: Accounting
On January 1, ABC Inc. sold used equipment with a cost of $14,500 and a carrying...
On January 1, ABC Inc. sold used equipment with a cost of $14,500 and a carrying amount of $1,300 to XYZ Inc. in exchange for a $6,600, three-year non–interest-bearing note receivable. Although no interest was specified, the market rate for a loan of that risk would be 7%. Assume that Teal Mountain follows IFRS.
(a) Prepare the entry to record the sale of ABC’s equipment and receipt of the note.
(b) Prepare the entries to record the recognition of interest each year.
(c) Prepare the entry to record the collection of the note at maturity.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
ABC Inc. purchased machinery and equipment in the amount of $125,000 on January 1, 2019. ABC...
ABC Inc. purchased machinery and equipment in the amount of
$125,000 on January 1, 2019. ABC will amortize this asset straight
line over 18 years, with no salvage value. For tax purposes these
assets are to be depreciated using a capital cost allowance rate of
15% each year of the original value (i.e. $125,000). ABC pays tax
at a rate of 35%.(reminder of half-net year rule).
Required:
a) What is the amount of the temporary difference between
straight line depreciation...
On january 1, 2014, ABC Co. sold a mining equipment to surigao mining for 1,500,000 which...
On
january 1, 2014, ABC Co. sold a mining equipment to surigao mining
for 1,500,000 which ABC accepted a 10% , 3-year noe payable in
three equal annual payments every December 31 starting in 2014.The
interest is to be paid every end of the year. The cost of the
equipment to ABC Co. was 500,000.
prepared journal entry for all the transactions affecting the
said sales of equipment on january 1, 2014 up to the time the note
is fully...
ABC Company purchased equipment that cost $2,000,000 on January 1, 2019. The entire cost was recorded...
ABC Company purchased equipment that cost $2,000,000 on
January 1, 2019. The entire cost was recorded as an expense. The
equipment had a ten-year life and a $100,000 residual value. ABC
uses the straight-line method to account for depreciation expense.
The error was discovered on December 10, 2022. ABC is subject to a
30% tax rate.
What is the adjustment to retained earnings at January
1, 2022?
Question (2) ABC Company purchased equipment at a cost of $120,000 on January 1, 2018 that...
Question (2)
ABC Company purchased equipment at a cost of
$120,000 on January 1, 2018 that
it expects to be useful for four years, and to
have a residual value of $8,000. The Company uses
the Double-declining balance method for depreciation.
Required: Compute the Depreciation expense for each
of 2018 and
2019.
On January 1, 2014, Fishbone Corporation sold equipment to Lost Company that cost $250,000 and that...
On January 1, 2014, Fishbone Corporation sold equipment to Lost
Company that cost $250,000 and that had accumulated depreciation of
$100,000 on the date of sale. Fishbone received as consideration a
$240,000 non-interest-bearing note due on December 31, 2016. The
prevailing rate of interest for a note of this type on January 1,
2014, was 5%
A. Record the 1/1/14 transaction for fishbone
corporation and all necessary entries from 2014-2016.
B. Record the 1/1/14 transaction for Lost Company and
all...
On January 1, 2014, Fishbone Corporation sold equipment to Lost Company that cost $250,000 and that...
On January 1, 2014, Fishbone Corporation sold equipment to Lost
Company that cost $250,000 and that had accumulated depreciation of
$100,000 on the date of sale. Fishbone received as consideration a
non-interest-bearing note requiring payments of $80,000 annually
for 3 years. The first note payment is to be made on January 1,
2014. The prevailing rate of interest for a note of this type on
January 1, 2014, was 5%.
Record the 1/1/14 transaction for Fishbone Corporation and all
necessary...
1. On January 1, 2019, ABC Company purchased a new piece of equipment. The equipment was...
1. On January 1, 2019, ABC Company purchased a new piece of equipment.
The equipment was assigned a $7,000 residual value and is expected
to produce a total of 60,000 units over its life. The depreciation
expense reported on the equipment for 2019 was $10,734. During 2020,
the equipment was used to produce 9,000 units. At December 31, 2020,
the book value of the equipment was $57,466. ABC Company is using the
units-of-production depreciation method to depreciate the equipment.
Calculate...
Pen Corporation owned equipment with an original cost of $90,000. On January 1, 2019, Pen sold...
Pen Corporation owned equipment with an original cost of
$90,000. On January 1, 2019, Pen sold the equipment to Sen Company
(a 60%-owned subsidiary) for a price of $82,400. At the time of the
intercompany sale, the equipment had been depreciated for $18,400.
The equipment has a remaining useful life of 8 years and is
straight-line depreciated. On January 1, 2021, Sen sold the
equipment to an outside company for $63,200.
(i) Prepare the working paper
eliminating entry regarding the...
On January 1, Year 1, Josh Corp. sold equipment to Mayfair Inc. (its 100% sub) for...
On January 1, Year 1, Josh Corp. sold equipment to Mayfair Inc.
(its 100% sub) for $120,000 in cash. The equipment originally cost
$160,000 but had a book value of $96,000 when transferred. On that
date, the equipment had a five-year remaining life
1. Prepare the
consolidation entries relating to the equipment sale for 12/31,
Year 1.
2. Prepare the consolidation
entries relating to the equipment sale for 12/31, Year 2.
a) On January 1, 2020, Blue Inc. sold computer equipment to Larkspur Co. The sales price...
a) On January 1, 2020, Blue Inc. sold computer equipment to
Larkspur Co. The sales price of the equipment was $511,000 and its
carrying amount is $396,000. Record any journal entries necessary
for Blue from the sale of the computer equipment in 2020.
b) Use the information from part a. Assume that, on the same day
the sale occurred, Blue enters into an agreement to lease the
equipment from Larkspur for 10 years with annual lease payments of
$69,428.50 at...
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