Blue Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $169,800. The company estimated that the machine would have a salvage value of $16,800 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 20,000 hours. Year-end is December 31. Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to 0 decimal places, e.g. 45,892.) (a) Straight-line depreciation for 2020 $enter a dollar amount (b) Activity method for 2020, assuming that machine usage was 800 hours $enter a dollar amount (c) Sum-of-the-years'-digits for 2021 $enter a dollar amount (d) Double-declining-balance for 2021

Marigold Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $127,500. The company estimated that the machine would have a salvage value of $10,500 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 20,000 hours. Year-end is December 31.

Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to 0 decimal places, e.g. 45,892.)

(a)      
Straight-line depreciation for 2020
$enter a dollar amount
(b)      
Activity method for 2020, assuming that machine usage was 880 hours
$enter a dollar amount
(c)      
Sum-of-the-years'-digits for 2021
$enter a dollar amount
(d)      
Double-declining-balance for 2021

Question 2: A company wants to get its working capital calculated by you. You are given the following estimates for the year 2020 In addition to that add 5 percent to your figures for contingencies. Calculate the average amount of working capital required for the year 2020.

Solution:

Required                                                                                           

(a) Calculate the depreciation expense using the straight-line method for 2019 and 2020.
(b) Calculate the depreciation expense using the diminishing-balance method and a depreciation rate of 25% for 2019 and 2020.
(c) Calculate the depreciation expense using the units-of-production method for 2019, assuming the machine usage was 1.820 hours.
(d) On 31 December 2020 the company discarded a delivery truck that was purchased on 1 January 2016 for $23,650 cash including
GST of 10% and was depreciated on a straight line basis with a useful life of 6 years and a residual value of $2150 (excluding GST).
What was the profit or loss on the scrapping of the truck?

Required information
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

2-a. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2019 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2020 (credit "Various accounts" for construction costs incurred).

Stacey Ltd purchased a new machine on 1 September 2019 at a cost of $206,100 (excluding GST). The entity estimated that the machine has a residual value of $29,700 (excluding GST). The machine is expected to be used for 36,000 working hours during its 8 year life. Assume a 31 December year-end. Required (a) Calculate the depreciation expense using the straight-line method for 2019 and 2020. (b) Calculate the depreciation expense using the diminishing-balance method and a depreciation rate of 25% for 2019 and 2020. (c) Calculate the depreciation expense using the units-of-production method for 2019, assuming the machine usage was 1,820 hours. (d) On 31 December 2020 the company discarded a delivery truck that was purchased on 1 January 2016 for $24,200 cash (including GST of 10%) and was depreciated on a straight line basis with a useful life of 6 years and a residual value of $2200 (excluding GST). What was the profit or loss on the scrapping of the truck?

Required                                                                                            

(a) Calculate the depreciation expense using the straight-line method for 2019 and 2020.
(b) Calculate the depreciation expense using the diminishing-balance method and a depreciation rate of 25% for 2019 and 2020.
(c) Calculate the depreciation expense using the units-of-production method for 2019, assuming the machine usage was 1,820 hours.
(d) On 31 December 2020 the company discarded a delivery truck that was purchased on 1 January 2016 for $24,200 cash (including GST of 10%) and was depreciated on a straight line basis with a useful life of 6 years and a residual value of $2200 (excluding GST).
What was the profit or loss on the scrapping of the truck?

question 2

Hanson Bank agrees to lend $ 250,000 to Mishin Corp. on May 1, 2020 and the company signs a $ 250,000, three-month, 6% note maturing on August 1, 2020.

Instructions

Prepare the journal entry to record the cash received by Mishin Corp. on May 1, the entry to record interest expense at Mishin’s year-end of July 31 and the entry at maturity of the note.

Question # 3

Dividends on preferred shares

At December 31, 2020, Russia Inc. has outstanding the following shares:

       5,000, $ 3.20, no par value preferred shares with a carrying value of $ 200,000, and 40,000 no par value common shares with a carrying value of $ 600,000.

No dividends have been paid since December 31, 2017. The corporation now desires to distribute $ 120,000 in dividends.

Instructions

Calculate how much the preferred and common shareholders will receive if the preferred shares are cumulative and fully participating.