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aivan3 [116]
3 years ago
15

XYZ, Inc. purchased an office building on October 1, 2020, that was put on the books at $800,000. The building is expected to be

used for 35 years and at the end of the 35 years will be sold for an estimated selling price of $100,000. XYZ closes its books at the end of every calendar year. XYZ, Inc. uses the straight-line method of depreciation. Based on this information, which of the following is correct?
a. Depreciation Expense at 12/31/20 is $20,000.
b. Accumulated Depreciation at 12/31/20 is $20,000
c. Depreciation Expense at 12/31/2021 is $5,000
d. Accumulated Depreciation at 12/31/21 is $25,000
Business
1 answer:
Alika [10]3 years ago
4 0

Answer:

d. Accumulated Depreciation at 12/31/21 is $25,000

Explanation:

Depreciable amount = $800,000 - $100,000 = $700,000

Annual depreciation expenses = $700,000 / 35 = $20,000

Depreciation expenses for 2020 (3 months i.e. Oct. 1 - Dec. 31) = $20,000 * (3 / 12) = $5,000.

Accumulated depreciation at 12/31/21 = Depreciation for 2020 + 2021 annual depreciation expenses = $5,000 + $20,000 + $25,000.

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Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of $75,600, $294,000, and $470,400, r
MA_775_DIABLO [31]

Answer:

salary allowances of $83,600 to Mo, $62,700 to Lu, and $94,500 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb.

net income $498,000, total distributions:

  • Mo = $83,600 + (20% x $257,200) = $135,040
  • Lu = $62,700 + (40% x $257,200) = $165,580
  • Barb = $94,500 + (40% x $257,200) = $197,380

First we need to close Income Summary account to each partner's capital account:

December 31, 202x

Dr income summary 498,000

    Cr Mo Meek, capital 135,040

    Cr Lu Ling, capital 165,580

    Cr Barb Beck, capital 197,380

then we close the drawings accounts to the capital accounts of each partner:

December 31, 202x

Dr Mo Meek, capital 39,300

    Cr Mo Meek, drawings 39,300

Dr Lu Ling, capital 53,300

    Cr Lu Ling, drawings 53,300

Dr Barb Beck, capital 69,300

    Cr Barb Beck, drawings 69,300

3 0
3 years ago
A country has passed a law setting a minimum wage for factory workers 5% below the equilibrium price. How will this law impact t
kogti [31]
This law will impact the labor market cause of low pay rate that will stop more people from applying for that job
6 0
3 years ago
A company orders office supplies in June. Those supplies are received and used in July. The supplies are paid for in August. In
Leviafan [203]

Answer:

Expense must be recognized in July

Explanation:

The reason is that the expense must be recognized in the month in which the supplies are used because the accrual concept says that the expenses must be realized when they are incurred. Incurred means that the consideration received has been used. For example if I pay the telecommunication network in June to give 4G internet and the services are delivered in the month July then the expenses will be realized in the month in which the services were used and that is July for internet facilities. So in this case the supplies are used in the month of July which is in-accordance with the accrual concept.

8 0
3 years ago
If investors expect inflation to increase over the next 20 years and the maturity risk premium is expected to increase over the
olganol [36]

Answer: normal /upward sloping

Explanation:

The yield curve is a curve that shows the relationship that exist between interest rate and time to maturity. According to the expectation theory, it is stated that the yield curve will be upward sloping when there's increase in inflationary expectations.

The slope of the yield curve helps in giving a clue to know the direction of future interest rates. It should be noted that an upward sloping curve means that there is an expectation of higher interest rates in the future.

Therefore, when investors expect inflation to increase over the next 20 years and the maturity risk premium to increase over the next 5 years, the general yield curve will be upward sloping.

5 0
3 years ago
The allowance for doubtful accounts currently has a debit balance of $200. The company's management estimates that 2.5% of net c
lidiya [134]

Answer:

Bad debt expense (w/o allowance) = $2,875

Bad debt expense ( with allowance) = $2,675.

Explanation:

According to the scenario, the given data are as follows:

Net credit sales = $115,000

Uncollectible percentage = 2.5%

So, we can calculate the bad debt expense without Allowance for doubtful accounts by using following method:

Bad debt expense ( W/o allowance) = $115,000 × 2.5%

= $2,875

After Allowance for doubtful expense

Bad debt expense = $2,875 - $200

= $2,675

4 0
3 years ago
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