Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 5, Problem 7.2E
To determine
Introduction: Consolidation is a process in which financial statements of a subsidiary is merged with financial statements of the parent. In this process, the effect of intercompany transactions is eliminated.
To record: The
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A company purchased a new machine on January 1, 2014. The supplier, "Forever supply" was paid $2,000 in cash. In addition, transportation and installation were $180 (paid in cash), legal costs associated with the asset were $20 (paid in cash). The machine has an estimated life of 5 years and an estimated salvage value of $300. It is company policy to use straight line depreciation for all of its machines.
question:
record the journal entry related to the purchase of the asset. Also, Record the first year depreciation expense in a journal entry. Include the classification of the accounts and clearly label your debits and credits.
Taylor Company purchased a machine for $9,800 on January 1, 2016. The machine has beendepreciated using the straight-line method assuming it has a five-year life with a $1,400residual value. Taylor sold the machine on January 1, 2018, for $7,600.Q7-61. What is the book value of the machine on December 31, 2017?a. $2,100b. $6,440c. $8,400d. $9,800
Rayya Co. purchases and installs a machine on January 1, 2017, at a total cost of $134,400. Straight-line depreciation is taken each year for four years assuming a eight-year life and no salvage value. The machine is disposed of on July 1, 2021, during its fifth year of service. Prepare entries to record the partial year’s depreciation on July 1, 2021, and to record the disposal under the following separate assumptions: (1) The machine is sold for $67,200 cash. (2) An insurance settlement of $56,448 is received due to the machine’s total destruction in a fire.
Chapter 5 Solutions
Advanced Accounting
Ch. 5 - Prob. 1UTICh. 5 - Subsidiary Company S has $1000,000 of bonds...Ch. 5 - Plessor Industries acquired 80% of the outstanding...Ch. 5 - Company P purchased $100,000 of subsidiary Company...Ch. 5 - Prob. 5UTICh. 5 - Prob. 6UTICh. 5 - Prob. 7UTICh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3.1E
Ch. 5 - Prob. 3.2ECh. 5 - Prob. 4ECh. 5 - Carlton Company is an 80%- owned subsidiary of...Ch. 5 - Carlton Company is an 80%- owned subsidiary of...Ch. 5 - Prob. 6.1ECh. 5 - Prob. 6.2ECh. 5 - Prob. 7.1ECh. 5 - Prob. 7.2ECh. 5 - Prob. 7.3ECh. 5 - Prob. 8.1ECh. 5 - Prob. 8.3ECh. 5 - Prob. 9ECh. 5 - Prob. 5.1.1PCh. 5 - Prob. 5.1.2PCh. 5 - Prob. 5.2PCh. 5 - Prob. 5.3PCh. 5 - Prob. 5.4PCh. 5 - Prob. 5.5PCh. 5 - Prob. 5.6PCh. 5 - Prob. 5.7PCh. 5 - Prob. 5.8.1PCh. 5 - Prob. 5.8.2PCh. 5 - Prob. 5.9PCh. 5 - Prob. 5.10PCh. 5 - Prob. 5.14PCh. 5 - Prob. 5.2.1CCh. 5 - Prob. 5.2.2CCh. 5 - Prob. 5.3.1CCh. 5 - Prob. 5.3.2CCh. 5 - Prob. 5.3.3CCh. 5 - Prob. 5.3.4C
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- Sunland, Inc. owns equipment that cost $ 142,000 and has a useful life of 10 years with no salvage value. On January 1, 2017, Sunland leases the equipment to Morgan Corporation for one year with one rental payment of $ 15,000 on January 1. Prepare Sunland’s 2017 journal entries.arrow_forwardSheridan Gas Co. purchases a gas station and convenience store on January 1, 2017, at a cost of $665,000. Sheridan expects to operate the store and gas station for 20 years. The company is legally required to remove the underground gas storage tanks from the facility at the end of its useful life. Sheridan estimates that it will cost $91,000 to remove the tanks at the end of the facility’s useful life. Prepare the journal entries to record the purchase of the gas station/convenience store, as well as the asset retirement obligation for the gas station/convenience store on January 1, 2017. Based on an effective-interest rate of 8%, the present value of the asset retirement obligation on January 1, 2017, is $19,567.arrow_forwardA company purchased a new machine on January 1, 2014. The supplier, "Forever supply" was paid $2,000 in cash. In addition, transportation and installation were $180 (paid in cash), legal costs associated with the asset were $20 (paid in cash). The machine has an estimated life of 5 years and an estimated salvage value of $300. It is company policy to use straight line depreciation for all of its machines. question: Assume the machine was sold on July 1, 2015 to "company A" for $1200 cash. Prepare the journal entry/entries to record this transaction. What was the gain/loss? Include the classification of the accounts and clearly label your debits and credits.arrow_forward
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