Questions
Problem 11-10 Martinez Corporation, a manufacturer of steel products, began operations on October 1, 2016. The...
Problem 11-10
Martinez Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Martinez has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company’s records and personnel.
| 1. | Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. | |
| 2. | Land A and Building A were acquired from a predecessor corporation. Martinez paid $844,000 for the land and building together. At the time of acquisition, the land had an appraised value of $86,100, and the building had an appraised value of $774,900. | |
| 3. | Land B was acquired on October 2, 2016, in exchange for 2,600 newly issued shares of Martinez’s common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $28 per share. During October 2016, Martinez paid $15,300 to demolish an existing building on this land so it could construct a new building. | |
| 4. | Construction of Building B on the newly acquired land began on October 1, 2017. By September 30, 2018, Martinez had paid $307,000 of the estimated total construction costs of $428,900. It is estimated that the building will be completed and occupied by July 2019. | |
| 5. | Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair value at $38,900 and the salvage value at $2,700. | |
| 6. | Machinery A’s total cost of $181,800 includes installation expense of $540 and normal repairs and maintenance of $14,400. Salvage value is estimated at $6,500. Machinery A was sold on February 1, 2018. | |
| 7. | On October 1, 2017, Machinery B was acquired with a down payment of $5,280 and the remaining payments to be made in 11 annual installments of $5,540 each beginning October 1, 2017. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded). |
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Present value |
Present value |
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| 10 years | 0.463 | 10 years | 6.710 | |||
| 11 years | 0.429 | 11 years | 7.139 | |||
| 15 years | 0.315 | 15 years | 8.559 | |||
Complete the schedule below. (Round answers to 0
decimal places, e.g. 45,892.)
| Assets |
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Cost | Salvage |
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2017 | 2018 | |||||||||
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(3) ___ |
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(4) ___ | |||||||||
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N/A |
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— |
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30 | __ | (6) ___ | |||||||||
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10 | (8) ___ | (9) ___ | |||||||||
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8 | (11) ___ |
(12) ___ |
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— |
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20 | __ | (14) ___ |
In: Accounting
Skysong Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department...
Skysong Corporation, a manufacturer of steel products, began
operations on October 1, 2016. The accounting department of Skysong
has started the fixed-asset and depreciation schedule presented
below. You have been asked to assist in completing this schedule.
In addition to ascertaining that the data already on the schedule
are correct, you have obtained the following information from the
company’s records and personnel.
| 1. | Depreciation is computed from the first of the month of acquisition to the first of the month of disposition. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. | Land A and Building A were acquired from a predecessor corporation. Skysong paid $844,000 for the land and building together. At the time of acquisition, the land had an appraised value of $86,100, and the building had an appraised value of $774,900. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. | Land B was acquired on October 2, 2016, in exchange for 2,600 newly issued shares of Skysong’s common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $28 per share. During October 2016, Skysong paid $15,300 to demolish an existing building on this land so it could construct a new building. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4. | Construction of Building B on the newly acquired land began on October 1, 2017. By September 30, 2018, Skysong had paid $307,000 of the estimated total construction costs of $428,900. It is estimated that the building will be completed and occupied by July 2019. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5. | Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when donated placed the fair value at $38,900 and the salvage value at $2,700. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6. | Machinery A’s total cost of $181,800 includes installation expense of $540 and normal repairs and maintenance of $14,400. Salvage value is estimated at $6,500. Machinery A was sold on February 1, 2018. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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7. On October 1, 2017, Machinery B was acquired with a down payment of $5,280 and the remaining payments to be made in 11 annual installments of $5,540 each beginning October 1, 2017. The prevailing interest rate was 8%. The following data were abstracted from present value tables (rounded).
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In: Accounting
US Mkt. for auto parts. On Friday, US imposed new tariffs on auto parts imported from China
1. US Mkt. for auto parts. On Friday, US imposed new tariffs on auto parts imported from China. Pw is the price of auto parts available to domestic car producers before the imposition of tariffs. On the graph, show (1) the price of auto parts with tariff (PT): (2) quantity of auto parts produced by domestic producers (Qsd): (3) quantity of auto parts bought by domestic car manufacturers (Qdd); (4) quantity of auto parts imported (IM): (5) revenue from tariff (TR): (6) Tariff deadweight loss (DWL). Price of auto parts available to domestic car producers quantity of auto parts available to domestic car producers. quantity of auto parts produced in the US_______ .
2. US Mkt. cars. The changes in the price for auto parts affects supply/demand of cars because, _______
On the graph: (1) Show the effect of the change in the price of auto parts. (2) Show consumer surplus (CS0) and producer surplus (PS0) before the imposition of tariffs; (3) Show consumer surplus (CS1) and producer surplus (PS1) after the imposition of tariffs; Equilibrium price_______ equilibrium quantity_______ consumer surplus_______ , producer surplus_______
In: Economics
Throughout 2020, Moon Ltd. had 1,200,000 common shares outstanding. As well, the corporation paid $300,000 in...
Throughout 2020, Moon Ltd. had 1,200,000 common shares outstanding. As well, the corporation paid $300,000 in preferred dividends and reported net income of $5,100,000 for 2020. In connection with the acquisition of a subsidiary company in June 2019, Moon is required to issue 50,000 additional common shares on July 1, 2021, to the former owners of the subsidiary.
Moon’s diluted earnings per share for 2020 should be:
|
$4.25. |
|
$4.08. |
|
$4.00. |
|
$3.84. |
In: Accounting
. On January 3, 2020, Hanna Corp signed a lease on a machine and the lease...
. On January 3, 2020, Hanna Corp signed a lease on a machine and the lease commences the same date. The lease requires Hanna too make six annual lease payments of $12000 with the first payment due on December 31, 2020. Hanna could have financed the machine by borrowing at an interest rate of 7%. What entries would the company record on Jan 3 and December 31, 2020 if the lease is classified as a finance lease?
In: Accounting
32. Nabors Finance Company reported equipment with an original cost of $379,000 and $344,000 and accumulated...
32. Nabors Finance Company reported equipment with an original cost of $379,000 and $344,000 and accumulated depreciation of $153,000 and $128,000, respectively in its financial statements for years ended December 31, 2020 and 2019. During 2020, Nabors purchased equipment costing $50,000 and sold equipment with carrying amount of $9,000. What amount should Nabors report as depreciation expense for 2020?
a. $19,000 c. $31,000 b. $25,000 d. $34,000
In: Finance
Tesco coming to the US: Why is Tesco interested in the US market? How did Tesco...
In: Operations Management
Mintu Inc. creates, develops and sells several different types of consumer products. Before launching a new...
Mintu Inc. creates, develops and sells several different types of consumer products. Before launching a new product for commercialization, the company would typically test market the product. However, the CEO just heard that the competition is ready to launch a similar product. Provide 2 compelling arguments why, for this new launch, marketing testing ought to be skipped.
In: Finance
Describe the trade-off conditions that occur in the following conditions: a. A family decides to buy...
Describe the trade-off conditions that occur in the following
conditions:
a. A family decides to buy a new house.
b. The cabinet of government of country A decided to provide energy
subsidies to the public.
c. The CEO of the company XYZ decided to invest by opening a new
factory.
d. A recently graduated scholar decides to continue his education
to a higher level.
In: Economics
find an example of a company that failed to innovate, that failed (or is currently failing)...
find an example of a company that failed to innovate, that failed (or is currently failing) to keep up with a changing market (like Blockbuster Video, Sears/Kmart, Yahoo, MySpace, RadioShack, etc.). What did they do wrong? Does the fault like with the vision of the CEO and other executives? Or did the management structure operate poorly and was unable to execute the vision of the executives?
In: Finance