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11111nata11111 [884]
2 years ago
14

Graham Freightway provides freight service. The company's balance sheet includes Land, Buildings, and Motor-Carrier Equipment. G

raham Freightway uses a separate accumulated depreciation account for each depreciable asset. During 2012, Graham Freightway completed the following transactions:
Jan 1 âTraded in motor-carrier equipment with accumulated depreciation of $92,000 (cost of $131,000) for new equipment with a cash cost of $173,000. Graham Freightway received a trade-in allowance of $63,000 on the old equipment and paid the remainder in cash.

Jul 1 Sold a building that cost $580,000 and had accumulated depreciation of $280,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $40,000. Graham Freightway received $90,000 cash and a $590,000 note receivable.

Oct 31 Purchased land and a building for a cash payment of $600,000. An independent appraisal valued the land at
$234,600 and the building at $455,400.

Dec 31 Recorded depreciation as follows: New motor-carrier equipment has an expected useful life of 1 million miles and an estimated residual value of $23,000. Depreciation method is the units-of-production method. During the year, Graham Freightway drove the truck 160,000 miles.

Depreciation on buildings is straight-line. The new building has a 40-year useful life and a residual value equal to $40,000.

Required:
Record the transactions in Graham Freightway's journal.
Business
1 answer:
PIT_PIT [208]2 years ago
4 0

Answer:

Graham Freightway

Journal Entries:

Jan. 1:

Debit New Motor-carrier Equipment $236,000

Debit Accumulated Depreciation $92,000

Credit Old Motor-carrier Equipment $131,000

Credit Cash Account $173,000

Credit Gain on Equipment Disposal $24,000

To record the trade-in of old equipment for a new one.

July 1:

Debit Cash Account $90,000

Debit Note Receivable $590,000

Debit Accumulated Depreciation 286,750

Credit Building $580,000

Credit Gain on Building Disposal $386,750

To record the sale of building.

Oct. 31:

Debit Land $204,000

Debit Building $396,000

Credit Cash Account $600,000

To record the purchase of land and building for cash.

Dec. 31:

Depreciation Expense on New Motor-carrier Equipment $34,080

Credit Accumulated Depreciation on Equipment $34,080

To record the depreciation expense for the year.

Dec. 31:

Depreciation Expense on Building $2,225

Credit Accumulated Depreciation on Building $2,225

To record the depreciation expense for the 3 months.

Explanation:

a) Data and Calculations:

1. Gain on Equipment of $24,000 is based on the difference between the net book value of the equipment and the trade-in cost.

2. The same is also applicable on the Building.

3. Allocation of the purchased cost of $600,000:

Land = 234,600/690,000 * $600,000 = $204,000

Building = 455,600/690,000 * $600,000 = $396,000

4. Depreciation on New Motor-carrier equipment:

Depreciable amount = $213,000 ($236,000 - 23,000)

Useful life = 1 million miles

Estimated residual value = $23,000

Depreciation rate = $213,000/ 1 million = $0.213

1st year depreciation = $0.213 * 160,000 = $34,080

5. Depreciation on Building:

Depreciable amount = $356,000 ($396,000 - 40,000)

Useful life = 40 years

Estimated residual value = $40,000

Depreciation rate = $8,900 ($356,000/40)

For three months, depreciation expense = $8,900/12 * 3 = $2,225

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Why is it often difficult for a new supervisor or manager to be promoted from within? What specific challenges often accompany t
mina [271]

Answer:

It is difficult for new supervisors and managers to be promoted from within because adequate training are not provided. Most of the good habits that make up a good leader must be learned.

Explanation:

Challenges faced by new managers include:

1) Managing others while still actually working

It is important for managers to know how to differentiate between times they can focus their attention to employee concerns and times they decide not to attend to anyone and whether this is applicable to their team.

A calender will be needed for this type of situation.Schedule regular check-ins with employees, and block off times for you to focus on your own work. Unexpected and urgent situations will always arise, so you will have to add in some flexibility.

Resist the urge to make yourself available to every demand that comes your way.

2. Managing friends and former peers

When you attain the new rank of a manager, it is important to define the boundaries of your relationships with your subordinates as soon as possible.

Explain what you require from your staff and what they can expect from you. For your part, they will expect your trust, communication, and fairness, no matter how your relationship was defined before you were promoted as a manager.

3. Trying to make changes too quickly

First-time managers are always very excited to start making their marks on the organisation, but if you force too many changes at a fast rate, your staff may push back.

Take a collaborative approach on making changes to get the support of your staffs.

4. Giving direct feedback

A lot of new managers sometimes have a hard time delivering important feedback or having difficult conversations.

If you avoid telling an employee their faults and how they need to shape up, you might end up driving away others on your staff including your top performers by letting the problem spread.

It is also important to give positive feedback regularly.

8 0
2 years ago
18. Acidic foods, such as tomatoes or wine, are important in a braise to
Ksivusya [100]

A. thicken the sauce.

Acidic foods, such as tomatoes or wine, are important in a braise to thicken the sauce.

5 0
3 years ago
Read 2 more answers
A company forecasts free cash flow in next year to be $20 million, $25 million in second year, and 30 million in third year. Aft
Norma-Jean [14]

Answer:

Current value from operations is $534.71 million.

Explanation:

The value from operations can be calculated by discounting back the free cash flow of the firm. The first three year's FCF will be discounted back using the WACC and when the growth rate o FCF becomes constant after Year 3, the terminal value will be calculated and discounted back too.

The current value from operations = FCF1 / (1+WACC) + FCF2 / (1+WACC)² + FCF3 / (1+WACC)³  +  [FCF3 * (1+g)  /  WACC - g] / (1+WACC)³

Current value from operations = 20 / (1+0.1)  +  25 / (1+0.1)²  +  30 / (1+0.1)³  +  [30 * (1+0.05) / (0.1 - 0.05)] / (1+0.1)³

Current value from operations = $534.71 million

8 0
3 years ago
Read 2 more answers
If Treasury bills are currently paying 5.2 percent and the inflation rate is 2.7 percent, what is the approximate real rate of i
Alexxandr [17]

Answer:

2.43 %

Explanation :

Real Interest rate =  (1 + nominal rate) / (1 + inflation rate) - 1

therefore,

Real Interest rate =  1.052 / 1.027 - 1

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the approximate real rate of interest is 2.43 %

3 0
2 years ago
g Product #1 Product #2 Historical cost $26 $51 Replacement cost 16 28 Estimated cost to dispose 23 25 Estimated selling price 5
Darya [45]

Answer:Product 1 will be valued at $16,  Product 2 will be valued at $29

Explanation:

Lower of Cost or Market

Lower of Cost or Market is a Method for Valuing inventory which stipulates  that inventory must be valued at the lower of cost or market price. Market price is defined as the replacement cost of inventory. There is however a Criteria to be followed when using Replacement costs

The replacement cost should not exceed or should not be greater than the Net Realizable Value, Net Realizable Value is the net amount we would receive from the sale of inventory after settling cost of selling inventory. If Replacement Cost is greater than Net relizable value, Net Realizable Value will be compared to historical cost in determining the value of inventory

The Replacement Cost Should also not be less than Net relizable value minus Ordinary profit, if it is less , Net relizable value minus Ordinary profit will be compare to historical costs in determining the value of inventory.

Replacement costs will be used if they are lower than Net realizable value and Higher than Net relizable value minus Ordinary profit

Product 1

Historical cost = $26

Net Realizable Value = $52 - 23 = $29

Net realizable Value minus Ordinary Profit = $29 - ( 52 -26) = $3

Replacement Cost $16

Replacement costs ($16) are less than Net realizable value ($29) But they are higher than Net realizable value minus Ordinary Profit ($3),. Product 1 will be valued at the lower of cost $26 or $16

Product 1 will be valued at $16

Product 2

Historical cost = $51

Net Realizable Value = $80 - 25 = $55

Net realizable Value minus Ordinary Profit = $29 - ( $80 -51) = $29

Replacement Cost $28

Replacement costs ($28) are less than Net realizable value ($55). They are also lower than Net realizable value minus Ordinary Profit ($29). Product 2 will be valued at the lower of cost $51 or $29

Product 2 will be valued at $29

5 0
3 years ago
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