The Orange Company purchased equipment on June 1, 2020. Assuming the cost of the equipment is $70,000, the residual value is $6,000, a useful life of 4 years and the use of the diminishing balance method using 2 times the straight line rate. The company's year end is December 31.
Round all answers to the nearest dollar.
1) What is depreciation expense for the year ended December 31, 2020?
2) What is the depreciation rate (%)?
3) What is accumulated depreciation for the year ended December 31, 2022?
4) What is the carrying value of the asset for the year ended December 31, 2024?
5) What is depreciation expense for the year ended December 31, 2024?
You were asked to prepare the journal entry to record the sale of the above equipment on December 31, 2022.
Is it a gain or loss if the equipment was sold for $10,000?
How much is the gain or loss?
In: Accounting
The Red Company purchased equipment on June 1, 2020. Assuming the cost of the equipment is $66,000, the residual value is $6,000, a useful life of 5 years and the use of the straight line method. The company's year end is December 31.
1) What is depreciation expense at December 31, 2020? $ Answer
2) What is accumulated depreciation at December 31, 2022? $ Answer
3) What is the carrying value of the asset at December 31, 2023? $ Answer
4) What is the carrying value of the asset at January 1, 2024? $ Answer
5) What is depreciation expense at December 31, 2025? $
Answer
You were asked to prepare the journal entry to record the sale of the above equipment on December 31, 2022.
Is it a gain or loss if the equipment was sold for $30,000? Answer
How much is the gain or loss? $ Answer
In: Accounting
During 2020, Flint Company started a construction job with a contract price of $1,610,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$393,900 | $760,380 | $1,059,000 | |||
|
Estimated costs to complete |
616,100 | 341,620 | –0– | |||
|
Billings to date |
299,000 | 905,000 | 1,610,000 | |||
|
Collections to date |
268,000 | 818,000 | 1,421,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$enter a dollar amount |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$enter a dollar amount |
|
|
Gross profit recognized in 2022 |
$enter a dollar amount |
List of Accounts
Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when 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. For costs incurred use account Materials, Cash, Payables.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
(To record cost of construction.) |
||
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
(To record progress billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
List of Accounts
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Gross profit |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
In: Accounting
During 2020, Nash Company started a construction job with a contract price of $1,620,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$444,400 | $867,420 | $1,060,000 | |||
|
Estimated costs to complete |
565,600 | 230,580 | –0– | |||
|
Billings to date |
301,000 | 904,000 | 1,620,000 | |||
|
Collections to date |
272,000 | 814,000 | 1,411,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$enter a dollar amount |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$enter a dollar amount |
|
|
Gross profit recognized in 2022 |
$enter a dollar amount |
List of Accounts
Question Part Score
--/9
Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when 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. For costs incurred use account Materials, Cash, Payables.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
(To record cost of construction.) |
||
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
(To record progress billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
List of Accounts
Question Part Score
--/6
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Gross profit |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
In: Accounting
On July 31, 2020, Crane Company paid $2,950,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Crane. Conchita reported the following balance sheet at the time of the acquisition.
|
Current assets |
$720,000 |
Current liabilities |
$520,000 |
|||
|---|---|---|---|---|---|---|
|
Noncurrent assets |
2,650,000 |
Long-term liabilities |
420,000 |
|||
|
Total assets |
$3,370,000 |
Stockholders’ equity |
2,430,000 |
|||
|
Total liabilities and stockholders’ equity |
$3,370,000 |
It was determined at the date of the purchase that the fair value
of the identifiable net assets of Conchita was $2,650,000. Over the
next 6 months of operations, the newly purchased division
experienced operating losses. In addition, it now appears that it
will generate substantial losses for the foreseeable future. At
December 31, 2020, Conchita reports the following balance sheet
information.
| Current assets |
$420,000 |
||
| Noncurrent assets (including goodwill recognized in purchase) |
2,300,000 |
||
| Current liabilities |
(640,000 |
) |
|
| Long-term liabilities |
(440,000 |
) |
|
| Net assets |
$1,640,000 |
Finally, it is determined that the fair value of the Conchita
Division is $1,850,000.
Compute the amount of goodwill recognized, if any, on July 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)
| The amount of goodwill |
$enter The amount of goodwill in dollars |
Determine the impairment loss, if any, to be recorded on December 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)
| The impairment loss |
$enter the impairment loss in dollars |
Assume that fair value of the Conchita Division is $1,590,000 instead of $1,850,000. Determine the impairment loss, if any, to be recorded on December 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)
| The impairment loss |
$enter The impairment loss in dollars |
Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. (Credit account titles are automatically indented when 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 |
|---|---|---|
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
| This loss will be reported in income as a separate line item before the subtotal select an income statement item Income from Discontinued OperationsCost of Goods SoldIncome From Continuing OperationsExtraordinary Items. |
In: Accounting
During 2020, Tamarisk Company started a construction job with a
contract price of $1,620,000. The job was completed in 2022. The
following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$373,700 | $749,360 | $1,070,000 | |||
|
Estimated costs to complete |
636,300 | 352,640 | –0– | |||
|
Billings to date |
302,000 | 907,000 | 1,620,000 | |||
|
Collections to date |
268,000 | 815,000 | 1,425,000 |
Compute the amount of gross profit to be recognized each year,
assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
225,700 |
|
|---|---|---|
|
Gross profit recognized in 2021 |
126,540 |
|
|
Gross profit recognized in 2022 |
197,760 |
Prepare all necessary journal entries for 2021.
(Credit account titles are automatically indented when
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. For costs incurred use account Materials, Cash,
Payables.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
(To record cost of construction.) |
||
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
(To record progress billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
In: Accounting
Bell Company, a manufacturer of audio systems, started its
production in October 2020. For the preceding 3 years, Bell had
been a retailer of audio systems. After a thorough survey of audio
system markets, Bell decided to turn its retail store into an audio
equipment factory.
Raw material costs for an audio system will total $75 per unit.
Workers on the production lines are on average paid $14 per hour.
An audio system usually takes 5 hours to complete. In addition, the
rent on the equipment used to assemble audio systems amounts to
$5,300 per month. Indirect materials cost $7 per system. A
supervisor was hired to oversee production; her monthly salary is
$3,700.
Factory janitorial costs are $1,600 monthly. Advertising costs for
the audio system will be $9,100 per month. The factory building
depreciation expense is $6,000 per year. Property taxes on the
factory building will be $8,400 per year.
Assuming that Bell manufactures, on average, 1,000 audio systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns.
Compute the cost to produce one audio system
In: Accounting
6. Make revenue forecast for Pacific Shoes for 2020
based on historical data if the company generated the following
revenues for the last five years. Calculate the forecast error,
draw a graph with the actual and forecasted revenue by year, and
show the forecast error on the graph.
Year.
2015 2016 2017 2018 2019
Revenue (Million $) 23 27 27
32.
30
In: Economics
1. It is January 1 2020 and you have recently started a new company, GreenDrone, that produces flying drones for garden maintenance. You are still at the product development stage but would like to evaluate the financial feasibility of the project. Here are some information about the company: - R&D expenditures. In order to develop the drones, you need to hire an engineer for 5 years at an annual salary of $96,000. The salary is paid monthly at the end of the month in equal amounts, i.e. 96,000/12 per month for the first year. To stay competitive, you expect you will have to grow the annual salary at a rate of 3%, starting the next year. The engineer contract starts today, i.e., on January 1 2020. - Production cost. Once the product is developed in 5 years (January 1 2025), you will start the production of your drones. Each product is expected to cost $265 to produce. The cost is to be paid to the supplier at the beginning of a month. - Pricing and sales. You plan to sell the drones for $325 a unit over the next three years, i.e., until January 1 2028. All sales for products produced in a month are collected at the end of the month. The appropriate discount rate r is 5%, annually compounded. Denoting the quantity of drones sold in a month by Q. How many drones do you need to sell per month to make this project profitable (i.e., generate a positive NPV)?
In: Finance
It is January 1 2020 and you have recently started a new company, Green- Drone, that produces flying drones for garden maintenance. You are stillat the product development stage but would like to evaluate the financial feasibility of the project. Here are some information about the company:
- R&D expenditures. In order to develop the drones, you need to
hire an engineer for 5 years at an annual salary of $96,000. The
salary is paid monthly at the end of the month in equal amounts,
i.e. 96,000/12 per month for the rst year. To stay competitive, you
expect you will have to grow the annual salary at a rate of 3%,
starting the next year. The engineer contract starts today, i.e.,
onJanuary 1 2020.
- Production cost. Once the product is developed in 5 years
(January 1 2025), you will start the production of your drones.
Each product is expected to cost $265 to produce. The cost is to be
paid to the supplier at the beginning of a month.
- Pricing and sales. You plan to sell the drones for $325 a unit
over the next three years, i.e., until January 1 2028. All sales
for products produced in a month are collected at the end of the
month. The appropriate discount rate r is 5%, annually compounded.
Denoting the quantity of drones sold in a month by Q. How many
drones do you need to sell per month to make this project protable
(i.e., generate a positive NPV)?
In: Finance