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2 years ago

At December 31, 2019, Swifty Corporation reported the following as plant assets.

Business

1 answer:

Kay [80]2 years ago

6 0

Answer:

April 01 2020

Land Debit $ 2,200,000

Cash Credit $2,200,000

To record purchase of land

May 01 2020

Cash Debit $ 504,000

Allowance for depreciation equipment Debit $ 363,720

Equipment Credit $ 840,000

Gain on sale of equipment Credit $ 27,720

To record sale of equipment and to recognise gain on sale

June 01 2020

Cash Debit $ 1,450,000

Land Credit $ 399,000

Gain in sale of land Credit $1,051,000

To record sale of land and gain on the sale

July 01 2020

Equipment Debit $ 2,480,000

Cash Credit $ 2,480,000

To record purchase of equipment

December 31 2020

Allowance for depreciation Debit $ 491,000

Equipment Credit $ 491,000

To record retirement of equipment

The adjusting entry for depreciation is as follows:

December 31 2020

Depreciation expense - Equipment Debit $ 4,985,000

Depreciation expense - Buildings Debit $ 578,200

Allowance for depreciation - Equipment Credit $ 4,985,000

Allowance for depreciation - Buildings Credit $ 578,200

Explanation:

Computation for Depreciation expense for the year

Equipment Jan 01 2020 $ 48,670,000 for 4 months @ 10 %

Sales - May 01 2020 $( 840,000)

Adjusted balance May 01 2020 $ 47,830,000 for 2 months @ 10 %

Purchases July 01 2020 $ 2,480,000

Adjusted balance July 01 2020 $ 50,310,000 for 6 months @ 10 %

Depreciation expense for 4 months = $ 48,670,000*10 % *4/12 = $1,622,333

Depreciation expense for 2 months = $ 47,830,000*10 % *2/12 = $ 797,167

Depreciation expense for 6 months = $ 51,310,000*10 % *6/12 =$ 2,565,500

Total depreciation equipment $ 4,985,000

Depreciation on buildings $ 28,910,000 * 2 % $ 578,200

Depreciation has to be recorded for full year on assets retired on December 31 2020

Computation of gain and loss on sale of equipment

Cost of equipment purchased on January 1 2016 $ 840,000

Depreciation rate 10 %

Equipment sold on May 01 2020

Depreciation charged for 4 years and 3 months @ 10 %

$ 840,000 * 4.33 *10 % $ 363,720

Net book value of equipment disposed on May 01 2020 $ 476,280

Sale value of equipment $ 504,000

Gain on sale of equipment $ (27,720 )

The gain on sale of land is the difference between the cost and sales proceeds since land is not depreciated

Sale proceeds - Cost = $ 1,450,000 - $ 399,000 = $ 1,051,000

The assets that was retired on Dec 31 2020 was purchased on December 31 2010 and was considered for depreciation for 10 years and was fully depreciated and had ni book value on the date of retirement

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Which of the following statements are true regarding externalities? (Check all that apply.) A. Deadweight loss can be either

ella [17]

Answer:

Explanation:

A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.

A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.

Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible

Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low

Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality.

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3 years ago

Which of the following is a contrary indicator?A) odd-lot tradingB) breadth of market and market volumeC) short-interest and the

garri49 [273]

Answer:

Short Interest and the Advance/Decline line

Explanation:

The Short Interest and the advance/descent line, also known as the AD line, is an indicator of market amplitude that gives the same weight to all the values of an index or market. The advance/descent line, also known as the AD line, is an indicator of market breadth that gives the same weight to all the values of an index or market.

The advance / descent line is an indicator of market breadth because it informs us of the general market movement. Similarly, when we say that it gives the same weight to all stock index values, we are saying that for the forward / down line all values are equally important.

What really interests this indicator, being of market breadth, is to see if the price movement is accompanied by the movement of the indicator.

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2 years ago

In 2021, the Marion Company purchased land containing a mineral mine for $1,150,000. Additional costs of $448,000 were incurred

babymother [125]

Answer:

Marion Company

a1) Depletion of the Mine for two years:

2018: 41,000/310,000 * $1,488,000 = $196,800

2019: 51,000/397,500 * $1,488,000 = $190,913

a2) Depreciation of Mining Facilities:

2018: 41,000/310,000 *$102,300 = $13,530

2019: 51,000/397,500 * $102,300 = $13,125

a3) Depreciation of Mining Equipment

2018: 41,000/310,000 *$46,500 = $6,150

2018: 51,000/397,500 * $46,500 = $5,966

b) Book Values December 31, 2019:

1) Mineral Mine:

Cost = $1,598,000

Accumulated Depletion $387,713 (2018 & 2019)

Book Value = $1,210,287

b2) Structures:

Cost = $102,300

Accumulated Depreciation $26,655 (2018 & 2019)

Book Value = $75,645

b3) Equipment:

Cost = $51,500

Accumulated Depreciation $12,116

Book Value = $39,384

Explanation:

a) Cost of Mine:

Land $1,150,000

Development $448,000

Less Resale ($110,000)

Total cost = $1,488,000

b) Cost of Facilities or Structure:

Building cost = $102,300

c) Cost of Equipment = $51,500 - $5,000 = $46,500

d) Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources. It is like depreciation and amortization, which lower the cost value of an asset incrementally through periodic charges to income.

e) Depreciation is an accounting method for allocating the cost (the value used up) of a tangible or physical asset over its useful life.

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3 years ago

What happened to the American and Filipino troops that surrounded on the Philippines

cestrela7 [59]

On this day in 1942, U.S. Lieutenant General Jonathan Wainwright surrender all U.S. troops in the Philippines to the Japanese

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3 years ago

Farrokh and Scheherezade Sharabianlou agreed to buy a building owned by Berenstein Associates for $2 million. They deposited $11

s2008m [1.1K]

Answer:

This was an actual court case that ended in the Court of Appeals of the First District of California. Initially a lower court had ruled against the Sharabianlous and set extremely high compensations for damages to Berenstein. I do not understand why the court did it since it was proven that the land was contaminated and couldn't be sold under unless cleaned.

Finally, the court of appeals ruled in favor of the Sharabianlous, not because they thought they were right, but due to errors in the original trial.

The big issue in this case was that the contract signed by the Sharabianlous wasn't clear enough about what would happen if the land was not suitable for sale and they also failed to seek a lawyer when the contamination issues became obvious. If you read the case, even the real estate broker acted against the Sharabianlous when the property was appraised since he didn't tell the appraiser about the contamination issues.

The final ruling was made in 2010, 8 years after the parties engaged in the transaction, which gives us an idea of how complicated things can get when legal procedures are not followed, even though the outcome should be obvious.

If I was part of a jury and the case was about property that couldn't be sold due to contamination, I would probably vote in favor of the buyer, not the seller. It's common sense, but sometimes it you do not follow the appropriate legal path, common sense makes no sense at all.

6 0

3 years ago