On July 1, 2008, Red Gate Farm buys a combine for $100,000 in cash. Assume that the combine is expected to have seven year life and an estimated salvage value of $16,000 at the end of that time. Required 1. Prepare the journal entry to record the purchase of the combine on July 1, 2008. 2. Compute the depreciable cost
What is meant by a step-up in the conversion price?
I have several study questions that I need assistance with answering. ________________________________________ Denny Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. The company's estimator has been involved in a long-simmering dispute with the on-site work s
Explain the difference between short-term and long-term investments. Cite examples of each.
Johnsfield & Co. will be undertaking the following financial transactions in the next planning period. For each transaction represented in the table below, check the statement or statements that will be affected immediately. `Pro Forma Income Pro Forma Balance Transaction Cash Budget Statement S
Congratulations! You have been hired by Claire's Antiques as its new accountant. Since Claire's Antiques is a small company, you will responsible for all of its accounting functions related to financial and managerial accounting. You are explaining your new role to your friend. After explaining what you do, she expressed sur
High Tension Transformers, Inc., manufactures heavy-duty transformers for electrical switching stations. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and government. The company has provided the following data: Year 1 Year 2 Year
Carson Corp. stock sells for $71 a share and you've decided to purchase as many shares as you possibly can. You have $13,000 available to invest. What is the maximum number of shares you can buy if the initial margin is 60%?
On Apr. 1: Does Rent Expense need to be listed first and then Prepaid Rent? Why? April 1 Signed a one year office building rental agreement for $12,000. The company paid the entire amount of $12,000. The portion of the cost related to April is recorded as an expense for April. Apr 1 Rent Expense
Suppose you bought 100 shares of stock at an initial price of $73 per share. The stock paid a dividend of $0.88 per share during the following year and the share price at the end of the year was $82. Compute your total dollar return on this investment. Does your answer change if you keep the stock instead of selling it?
Also see attached file In columns (a) and (b) indicate whether the change in the account would be recorded as a debit or a credit and whether the normal balance of the account is a debit or a credit. In column (c) indicate if the basic type of account is Asset, Liability or Stockholder's Equity. (a) (b ) (c) Recorde
What are the benefits of having a Uniform Commercial Code (UCC) for business transactions? There are certain warranties provided by the Uniform Commercial Code (UCC). What are the various types of warranties that could apply to a large retail store?
Mary and Joe would like to save up $10,000 by the end of three years from now to buy new furniture for their home. They currently have $2500 in a savings account set aside for the furniture. They would like to make equal year end deposits to this savings account to pay for the furniture when they purchase it three years from now
1. Riscalla Company has two divisions, A and B. The following information is available: Division A Revenue: $300,000 Income: $30,000 Invested capital: $100,000 Cost of capital: 20% Division B Revenue: $350,000 Income: $90,000 Invested capital: $150,000 Cost of capital: 15% Calculate the residual income for ea
Eastern Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate. It will use the dividend valuation model for analysis purposes. The model formula is as follow: P0 = __D1___ Ke - g P0 = Price of stock D1 = Dividend at the end of the first yea
The Keever Corporation's purchasing manager obtained a special price on an aluminum alloy from a new supplier, resulting in a direct-material price variance of $9,800(F). The alloy produced more waste than normal, as evidenced by a direct-material quantity variance of $3,000(U), and was also difficult to use. This slowed worker
24. Doug's records contain the following information: 1. Donated stock having a fair market value of $3,600 to a qualified charitable organization. He acquired the stock five months previously at a cost of $2,400. 2. Paid $700 to a church school as a requirement for the enrollment of his daughter. 3. Paid $200 for an
1). Anita, the controlling shareholder and an employee of Southwest Corporation, receives an annual salary of $750,000. Based on several factors including the size of the corporation's operations and a comparison of salary received by officers of comparably-sized corporations, the IRS contends that Anita's salary should be no h
1). Julie reports the following income and loss: Salary $ 90,000 Income from activity A 60,000 Loss from activity B ( 35,000) Loss from activity C ( 55,000) Activities A, B, and C are all passive activities. Based on this information, Julie has a. adjusted gross income of $60,000. b. salary of $90,000 and net losse
1). Mr. Dennis, sole proprietor of Dennis Company, purchased a machine for use in his business. Mr. Dennis' costs in connection with this purchase were as follows: Note to seller $33,000 Cash paid to seller 5,000
1). Michelle purchased her home for $150,000, and subsequently added a garage costing $25,000 and a new porch costing $5,000. Repairs to the home's plumbing cost $1,000. The adjusted basis in the home is a. $150,000. b. $151,000. c. $180,000. d. $181,000. 2). Which one of the following does not affect the adjusted basis
7. A project will increase sales by $140,000 and cash expenses by $95,000. The project will cost $100,000 and be depreciated using the straight-line method to a zero book value over the 4-year life of the project. The company has a marginal tax rate of 34%. What is the value of the depreciation tax shield? (Points: 2) $
Sun Lee's Furniture just purchased some fixed assets classified as 5-year property for MACRS. The assets cost $24,000. What is the amount of the depreciation expense for the third year? (Points: 2) $2,304 $2,507 $2,765 $4,608 $4,800
I need help with this problem. Megatronics corporation a massive retailer of electronics products, is organized in four separate divisions. The four divisional managers are evaluated at year-end, and bonuses are awarded based on ROI. Last year, the company as a whole produced a 13 percent return on its investment. During t
I need help with this problem. This is a sample problem that was brought up in class. Wyalusing Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customer' lots. Wyalusing expanded into the precut housing market when it acquired Fairmont Company, o
Rensing Company's December 31 year-end financial statements contained the following errors: Dec 31 2007 Dec 31 2008 Ending inventory $7,500 understated $11,000 overstated Depreciation Expense $2,000 understated An insurance premium of $18,000 was prepaid in 2007 cov
The following task are perfrmed by three employees, each of whom is capable of performing all of the tasks. Do not concern yourself with the time required to perform the tasks, but with the need to provide for segregation of duties. Assign the duties by using a check mark to indicate which employee should prform each task. Remem
27. The following totals for the month of June were taken from the payroll register of ABC Company: Salaries expense $13,000 Social security and Medicare Taxes withheld 975 Income Taxes withheld 2,600 Retirement Savings 500 The entry to record the payment of net pay would include a ________. debit to Salaries P
You have a client who is in possession of 1,000 acres of farm ground. The farm ground was purchased 10 years ago for $160,000, and is now worth $2,000,000. The client wishes to sell the farm ground and purchase an apartment building of approximately equal value to his farm ground. How would you suggest your client obtain the r
13. Bright Co. holds Park Co.'s $20,000, 120 day, 9% note. The entry made by Bright Co. when the note is collected, assuming no interest has previously been accrued is: Cash 20,000 Notes Receivable 20,000 Accounts Receivable 20,600 Notes Receivable 20,000 Interest Revenue 600 Cash 20,60