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luda_lava [24]
3 years ago
6

Berning Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimate

d life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, 2016 and was used 2,400 hours in 2016 and 2,100 hours in 2017. On January 1, 2018, the company decided to sell the tractor for $70,000. Berning uses the units-of-production method to account for the depreciation on the tractor. Based on this information, the entry to record the sale of the tractor will show:
Business
1 answer:
scoundrel [369]3 years ago
8 0

Answer:

$38,000 loss

Explanation:

For calculation of entry to record the sale of the tractor first we need to determine the total depreciation and net book value on Jan 1, 2018 which is shown below:-

Total depreciation = (Tractor cost - Salvage value) × (Hours in 2016 + Hours in 2017) ÷ Hours of operation

= ($180,000 - $20,000) × (2,400 + 2,100) ÷ 10,000

= $72,000

Net book value on January 1, 2018 = Tractor cost - Total depreciation

= $180,000 - $72,000

= $108,000

Loss on sale = Sold tractor amount - Net book value on January 1, 2018

= $70,000 - $108,000

= $38,000

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Answer:

customer orientation

Explanation:

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4 0
2 years ago
Auditors may decide to perform some tests of controls or not perform any tests of controls, if inherent risk is assessed as ____
Ivanshal [37]

Answer: Moderate or low

Explanation:

Tests of Control are one by auditors to determine the effectiveness of the internal controls in the company in being able to detect accounting errors and anomalies.

If a company seems to have a moderate or low inherent risk the Auditors may or may not initiate Tests of Control due to this reduced risk.

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6 0
2 years ago
Days sales outstanding. Baxley Brothers has a DSO of 23 days, and its annual sales are $3,650,000. What is its accounts receivab
marishachu [46]

Answer:

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Explanation:

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Days sales outstanding, DSO = 23 days

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Accounts receivable = (Annual sales × Days sales outstanding) ÷ 365 days

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4 0
3 years ago
Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning o
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Answer:

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Explanation:

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

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3 years ago
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