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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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Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for net sales using 20

babunello [35]

Answer:

119.4% for 2017 and 100.0% for 2016.

Explanation:

2017 2016

Net sales $276,200 $231,400

Cost of goods sold $151,900 $129,590

Operating expenses $55,240 $53,240

Net earnings $27,820 $19,820

since we are using 2016 as a base year, the $231,400 in net sales represent 100%, so the trend percentage for 2017 = net sales 2017 / net sales 2016 $276,200 / $231,400 = 1.1936 = 119.4% or a 19.4% increase.

The base year's amount will always be 100% or 1, and the trend percentages will change relative to that year.

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3 years ago

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A company is currently selling 10,000 units of product monthly for $40 per unit. The unit contribution margin is $27. The compan

Ludmilka [50]

Answer:

The company should accept the idea because profit will increase by $24,000.

Explanation:

A company is currently selling 10,000 units of product monthly for $40 per unit.

The unit contribution margin is $27.

The company believes that spending $50,000 per month on advertising will allow them to increase the selling price to $45 and that sales will increase by 750 units per month.

The unit contribution margin is the difference between selling price and variable cost per unit.

An increase in the selling price of $5 will cause the contribution margin to increase by $5, from $27 to $32.

Profits is the product of contribution margin and number of output.

At initial price, the profit was

= $10,000\ \times\ \$ 27$

= $270,000

At the new price the profit will be

= $10,750\ \times\ \$ 32$ - $50,000

= $344,000 - $50,000

= $294,000

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2 years ago

On January 1, Jamaica Company purchased equipment for $18,000. The estimated salvage value is $2,000 and the estimated useful li

Elanso [62]

Answer:

Depreciation expense on third year is $2,400

Explanation:

First, we must compute the depreciation expense for the first 2 years.

($18,000 - 2,000)/5years = $3,200 depreciation expense per year.

Second, let’s compute the net book value before the adjustment.

$3,200 x 2 years = $6,400 (total depreciation for 2 years)

$18,000 - $6,400 = $11,600 (Net book value before adjustment)

Finally we can now compute the Depreciation expense on the third year.

($11,600 - $2,000) / 3+1

$9,600/4 = $2,400 (new depreciation expense on third year)

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3 years ago

You purchased a share of stock for $53. One year later you received $3.00 as dividend and sold the share for $52. Your holding-p

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Answer:

the holding period return is 3.77%

Explanation:

The computation of the holding period return is shown below:

Holding period return is

= (Income + (Selling price - Purchase price)) ÷ Purchase price

= ($3 + ($52 - $53)) ÷ 53

= 3.77%

Hence, the holding period return is 3.77%

We simply applied the above formula so that the correct value could come

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2 years ago

Which of the following statements regarding budgets is true? a. Budgets are detailed forward-looking financial reports based on

Shkiper50 [21]

Answer:

a. Budgets are detailed forward-looking financial reports based on expected income and expenses.

Explanation:

A budget is a financial plan used for the estimation of revenue and expenditures of an individual, organization or government for a specified period of time, often one year. Budgets are usually compiled, analyzed and re-evaluated on periodic basis.

The first step of the budgeting process is to prepare a list of each type of income and expense that will be part of the budget.

The final step by the management of an organization in the financial decision making process is making necessary adjustments to the budget.

The benefits of having a budget is that it aids in setting goals, earmarking revenues and resources, measuring outcomes and planning against contingencies.

It is typically used by various organizations or companies due to the fact that, it's tied directly to the strategy and tactics of a company on an annual basis. Also, it is used to set a budget for marketing efforts while anticipating on informations about the company.

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2 years ago