Thomas Company acquired machinery on January 2, 2016, which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2020, Thomas estimated that the remaining life of this machinery was six years with no salvage value. How should this change be accounted for by Thomas?
Group of answer choices
by continuing to depreciate the machinery over the original fifteen year life
as a prior period adjustment
as a change in accounting principle in 2020
by setting future annual depreciation equal to one-sixth of the machinery’s book value on January 1, 2020
In: Accounting
The Free Group issues $100,000 of 6% bonds on January 1, 2020 for $107,795. The bonds will mature on December 31, 2029 (10 years). The market yield for bonds of similar risk and maturity is 5%. Interest is paid semiannually on July 1 and January 1.
a. Free Group has a calendar year-end and issues financial statements as of December 31.
Prepare the journal entry to record the issuance of the bonds on 1/1/2020 and any other journal entry(ies) required in 2020 related to this bond issuance. Free Group uses the effective interest method
In: Accounting
Beavis Construction Company was the low bidder on a construction
project to build an earthen dam for $1,820,000. The project was
begun in 2020 and completed in 2021. Cost and other data are
presented below:
| 2020 | 2021 | |||||
| Costs incurred during the year | $ | 518,000 | $ | 1,120,000 | ||
| Estimated costs to complete | 962,000 | 0 | ||||
| Billings during the year | 410,000 | 1,410,000 | ||||
| Cash collections during the year | 310,000 | 1,510,000 | ||||
Assume that Beavis recognizes revenue on this contract over time
according to percentage of completion.
Required:
Compute the amount of gross profit recognized during 2020 and
2021.
In: Accounting
Beavis Construction Company was the low bidder on a construction
project to build an earthen dam for $1,730,000. The project was
begun in 2020 and completed in 2021. Cost and other data are
presented below:
| 2020 | 2021 | |||||
| Costs incurred during the year | $ | 476,000 | $ | 1,030,000 | ||
| Estimated costs to complete | 884,000 | 0 | ||||
| Billings during the year | 470,000 | 1,260,000 | ||||
| Cash collections during the year | 370,000 | 1,360,000 | ||||
Assume that Beavis recognizes revenue on this contract over time
according to percentage of completion.
Required:
Compute the amount of gross profit recognized during 2020 and
2021.
In: Accounting
Demand function : QD(P) = 56 - 1/2P
Supply Function : Ps(Q)= 6Q
(1) Compute the market price and quantity in equilibrium.
(2) Compute the consumer and producer surplus in equilibrium.
In March 2020 an increase occurred, while the supply function did not change, the new reservation price for the demand function was found to be $200, while the slope of the demand function did not change.
(3) Compute the new market price and quantity in equilibrium as of March 2020.
(4) Compute the new consumer and producer surplus in equilibrium as of March 2020.
In: Economics
Mourinho Company is indebted to Guardiola Bank under a $550,000, 12%, three-year note dated December 31, 2018. Because of Morinho's financial difficulties developing in 2020, Mourinho owed accrued interest of $65,000 on the note at December 31, 2020. Under a troubled debt restructuring, on December 31, 2020, Guardiola agreed to settle the note and accrued interest for a building having a fair value of $410,000. The building has a cost of $820,000 and accumulated depreciation of $308,000. How much gain/loss on the disposition of land and on restructuring of debt should Mourinho record, respectively?
In: Accounting
During 2020, Sandhill Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$424,200 | $885,330 | $1,060,000 | |||
|
Estimated costs to complete |
585,800 | 207,670 | –0– | |||
|
Billings to date |
299,000 | 908,000 | 1,590,000 | |||
|
Collections to date |
273,000 | 819,000 | 1,435,000 |
Part 1
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$ |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$ |
|
|
Gross profit recognized in 2022 |
$ |
In: Accounting
9) For the 2019 tax returns, indicate when the statute of limitations expires and why. a. Phoenix filed his tax return on February 28, 2020. b. Jill and Randy filed their tax return on August 16, 2020. c. Although required to file, Catherine chose not to file a tax return this year because she was expecting a tax refund and could not pull together all the information needed to file the return. d. Jerry filed his tax return on May 22, 2020, but has accidentally underreported his taxable income by 30 percent.
In: Accounting
Southern Corporation began operations in January 2019 and purchased a machine for $120,000 at that time. Southern uses straight-line depreciation over a four-year period for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2019, 30% in 2020, and 20% in 2021. Pretax accounting income for 2020 – which is the SECOND year of using this machine – is $150,000, which includes interest revenue of $20,000 from municipal bonds. The enacted tax rate is 30% for all years. There are no other differences between accounting and taxable income.
Prepare the JE for 2020
In: Accounting
Ajax Products, Inc., reported an excess of warranty expense over warranty deductions of $72,000 for the year ended December 31, 2020. This temporary difference will reverse in equal amounts of $24,000 in years 2021, 2022, and 2023. The enacted tax rates are as follows: 2020: 40%; 2021: 25%; 2022: 21%; 2023: 20%. The reporting for this temporary difference at December 31, 2020, would be a
Question 4 options:
|
deferred tax liability of $15,840. |
|
|
deferred tax liability of $28,800. |
|
|
deferred tax asset of $28,800. |
|
|
deferred tax asset of $15,840. |
In: Accounting