On September 12, 3,800 shares of Aspen Company are acquired at a price of $43.00 per share plus a $190 brokerage commission. On October 15, a $1.10-per-share dividend was received on the Aspen Company stock. On November 10, 1,520.00 shares of the Aspen Company stock were sold for $36 per share less a $76 brokerage commission. When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method.
Sept. 12
Oct. 15
Nov. 10
In: Accounting
In: Economics
Monty Company acquired a plant asset at the beginning of Year 1.
The asset has an estimated service life of 5 years. An employee has
prepared depreciation schedules for this asset using three
different methods to compare the results of using one method with
the results of using other methods. You are to assume that the
following schedules have been correctly prepared for this asset
using (1) the straight-line method, (2) the
sum-of-the-years'-digits method, and (3) the
double-declining-balance method.
|
Year |
Straight-Line |
Sum-of-the- |
Double-Declining- |
|||||||||
| 1 | $10,620 | $17,700 | $23,600 | |||||||||
| 2 | 10,620 | 14,160 | 14,160 | |||||||||
| 3 | 10,620 | 10,620 | 8,496 | |||||||||
| 4 | 10,620 | 7,080 | 5,098 | |||||||||
| 5 | 10,620 | 3,540 | 1,746 | |||||||||
| Total | $53,100 | $53,100 | $53,100 | |||||||||
What is the cost of the asset being depreciated?
| Cost of asset |
$ |
What amount, if any, was used in the depreciation calculations
for the salvage value for this asset?
| Salvage value |
Which method will produce the highest charge to income in Year
1?
|
The method that produces the highest charge to income in Year 1 is |
Which method will produce the highest charge to income in Year
4?
| The method that produces the highest charge to income in Year 4 is |
Which method will produce the highest book value for the asset
at the end of Year 3?
| The method that produces the highest book value for the asset at the end of Year 3 is |
If the asset is sold at the end of Year 3, which method would
yield the highest gain (or lowest loss) on disposal of the
asset?
| The method that will yield the highest gain (or lowest loss) on disposal of the asset if the asset is sold at the end of Year 3 is |
In: Accounting
Early in 2018 Johnson Company was acquired by a new owner who discovered errors in the accounting records. The new owner would like you to analyze the error described and then determine the impact the accounting items listed. Each error should be analyzed separately. Be Sure to indicate the dollar amount or not the error caused the items to be overstated (OS) or Understated (US) or No Effect.
Vacation pay earned in 2017 of 31100 was not accrued in 2017. The vacation pay occurred in 2018 and expensed when paid.
Analysis:
Net Income for the period ending 12/31/2017__________________
Retained Earnings as of 12/31/2017__________________
Working Capital as of 12/31/2017_______________
Net Income for the period ending 12/31/2018________________
Retained Earnings as of 12/31/2018________________________
December 31, 2017 ending inventory was overstated by 50,000
Analysis:
Net Income for the period ending 12/31/2017 _______________
Retained Earnings as of 12/31/2017__________________
Working Capital as of 12/31/2017_________________
Net Income for the period ending 12/31/2018__________________
Retained Earnings as of 12/31/2018_________________
3.At the beginning of 2017 a machine was purchased for total cost of $50,000. The Machine had no salvage value and had a life of 15 years. The bookkeeper accidentally expensed the entire cost of the machine in 2017. Johnson company normally uses straight line depreciation.
Analysis:
Net Income for the period ending 12/31/2017____________________________
Retained Earnings as of 12/31/2017_____________________
Working Capital as of 12/31/2017_____________________
Net Income for the period ending 12/31/2018_____________________
Retained Earnings as of 12/31/2018_______________________
4.At the end of 2017. $30,000 of cash collected in advance for future services was included is Service revenue for the period ending 12/31/2017. The services will be performed equally in 2018 and 2019.
Net Income for the period ending 12/31/2017____________________________
Retained Earnings as of 12/31/2017_____________________
Working Capital as of 12/31/2017_____________________
Net Income for the period ending 12/31/2018_____________________
Retained Earnings as of 12/31/2018_______________________
In: Accounting
Upper Division of Lower Company acquired an asset with a cost of $560,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows.
| Year | Cash Flow | ||
| 1 | $ | 205,000 | |
| 2 | 270,000 | ||
| 3 | 290,000 | ||
| 4 | 315,000 | ||
The cost of the asset is expected to increase at a rate of 10 percent per year, compounded each year. Performance measures are based on beginning-of-year gross book values for the investment base. Ignore taxes.
Required:
a. What is the ROI for each year of the asset's life, using a historical cost approach?
b. What is the ROI for each year of the asset's life if both the investment base and depreciation are determined by the current cost of the asset at the start of each year?
In: Accounting
Assume that on January 1, 2012, a parent company acquired a 80% interest in a subsidiary’s voting common stock. On the date of acquisition, the fair value of the subsidiary’s net assets equaled their reported book values. On January 1, 2014, the subsidiary purchased a building for $336,000. The building has a useful life of 8 years and is depreciated on a straight-line basis with no salvage value. On January 1, 2016, the subsidiary sold the building to the parent for $294,000. The parent estimated that the building had a six year remaining useful life and no salvage value. The parent also uses the straight-line method of amortization. For the year ending December 31, 2016, the parent’s “stand-alone” income (i.e., net income before recording any adjustments related to pre-consolidation investment accounting) is $350,000. The subsidiary’s recorded net income is $70,000.
1)Based on this information, determine the balance for income from investment in subsidiary (on parent’s pre-consolidations books preceding consolidation):
A $21,000
B $28,000
C $56,000
D $63,000
2)Based on this information, determine the balance for consolidated building (net of accumulated depreciation):
A $210,000
B $245,000
C $294,000
D $336,000
3)Based on this information, determine the balance for consolidated depreciation expense:
A $25,200
B $29,400
C $42,000
D $49,000
4)Based on this information, determine the balance for consolidated net income attributable to the controlling interest:
A $371,000
B $378,000
C $406,000
D $413,000
5)Based on this information, determine the balance for consolidated income attributable to noncontrolling interest:
A $15,400
B $14,000
C $7,000
D $5,600
In: Accounting
A manufacturing company wants to verify the output of their newly acquired MRP software by comparing the computer output with their hand-calculated first ROP for each item in their BOM. They are examining output from their daily April 30 MRP.
|
LT=lead time Qd=lot size discipline SS=safety stock GR=Gross Requirements SR=Scheduled Receipts PBS=Projected Stock Balance POR=Planned Order Release
.
|
|
Question 10. What is the correct inventory policy?
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In: Operations Management
Windsor Company acquired a plant asset at the beginning of Year
1. The asset has an estimated service life of 5 years. An employee
has prepared depreciation schedules for this asset using three
different methods to compare the results of using one method with
the results of using other methods. You are to assume that the
following schedules have been correctly prepared for this asset
using (1) the straight-line method, (2) the
sum-of-the-years'-digits method, and (3) the
double-declining-balance method.
|
Year |
Straight-Line |
Sum-of-the- |
Double-Declining- |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $10,440 | $17,400 | $23,200 | |||||||||
| 2 | 10,440 | 13,920 | 13,920 | |||||||||
| 3 | 10,440 | 10,440 | 8,352 | |||||||||
| 4 | 10,440 | 6,960 | 5,011 | |||||||||
| 5 | 10,440 | 3,480 | 1,717 | |||||||||
| Total | $52,200 | $52,200 |
$52,200 |
|||||||||
What is the cost of the asset being depreciated?
What amount, if any, was used in the depreciation calculations for the salvage value for this asset?
Which method will produce the highest charge to income in Year 1?
Which method will produce the highest charge to income in Year 4?
Which method will produce the highest book value for the asset at the end of Year 3?
If the asset is sold at the end of Year 3, which method would yield the highest gain (or lowest loss) on disposal of the asset?
In: Accounting
At the beginning of 2018, Blue Dragon, a small private company, acquired a mine for $1,925,000. Of this amount, $190,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that approximately 18 million units of ore appear to be in the mine. Blue Dragon had $175,000 of development costs for this mine before any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the minerals have been removed was $70,000. During 2018, 3.0 million units of ore were extracted and 2.10 million of these units were sold.
Calculate the depletion cost per unit for 2018.
(Round answer to 3 decimal places, e.g.
52.751.)
Depletion Cost Per Unit: $________
Prepare the required journal entry, if any, for the total amount
of depletion for 2018. (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 Debit Credit
________
________
Prepare the required journal entry, if any, for the total amount that is charged as an expense for 2018 for the cost of minerals sold during 2018. (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. Round answers to 0 decimal places, e.g. 5,275.)
Account Debit Credit
______
______
In: Accounting
Company ABC acquired a machine at the beginning of the year. The machine had a 6-year useful life. He expensed the entire acquisition cost in the current year. His error has what effect on current period net income (NI) and retained earnings at the end of the 4th year (RE4)?
a. NI is understated; RE4 is understated
b. NI is understated; RE4 is correct
c. NI is overstated; RE4 is correct
d. NI is overstated; RE4 is understated
e. None of the above
Please help to explain for my better understanding.
In: Accounting