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earnstyle [38]
3 years ago
5

Berning Company purchased a tractor at a cost of $540,000. The tractor has an estimated salvage value of $60,000 and an estimate

d life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,100 hours in 2020. On January 1, 2021, the company decided to sell the tractor for $210,000. 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:
hjlf3 years ago
8 0

Answer:

Berning Company

Journal Entry to record the sale of Tractor:

Jan. 1, 2021:

Debit Sale of Tractor $540,000

Credit Equipment (Tractor) $540,000

To transfer the cost of tractor to Sale of Tractor.

Debit Accumulated Depreciation - Tractor $216,000

Credit Sale of Tractor $216,000

To transfer the depreciation to Sale of Tractor.

Debit Cash Account $210,000

Credit Sale of Tractor $210,000

To record the cash receipts from the sale.

Explanation:

a) Determination of Accumulated Depreciation for the Tractor:

Depreciable amount = $480,000 ($540,000 - $60,000)

Depreciable rate = $48 ($480,000/10,000) per hour

2019 Depreciation Expense =  $115,200 ($48 x 2,400)

2020 Depreciation Expense = $100,800 ($48 x 2,100)

Accumulated Depreciation = $216,000

b) Calculation of the Book Value = Cost - Accumulated Depreciation

= $540,000 - $216,000 = $324,000

c) Gain or Loss on Sale:  The sales proceed is compared with the book value to determine if there is a gain or loss from the sale.  In this case, there is a loss of $114,000 ($324,000 - $210,000), which will be transferred to the Income Summary.

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Mademuasel [1]
Business will be able to save the money they will recieve back from taxes.
5 0
3 years ago
Read 2 more answers
Inspection costs at one of Ratulowski Corporation's factories are listed below: Units Produced Inspection Costs April 922 $ 17,9
baherus [9]

Answer:

Fixed costs= $9,021.27

Explanation:

Giving the following information:

April 922 $ 17,912

May 983 $ 18,300

June 928 $ 17,965

July 912 $ 17,810

August 934 $ 17,994

September 919 $ 17,880

October 936 $ 18,032

November 876 $ 17,290

December 915 $ 17,838

<u>To calculate the variable and fixed component, we need to use the following formulas:</u>

<u />

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (18,300 - 17,290) / (983 - 876)

Variable cost per unit= $9.4392

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 18,300 - (9.4392*983)

Fixed costs= $9,021.27

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 17,290 - (9.4392*876)

Fixed costs= $9,021.27

4 0
3 years ago
The board of directors declared cash dividends totaling $160,000 during the current year. The comparative balance sheet indicate
Nikitich [7]

Answer: $164,300

Explanation:

Cash payments to stockholders shows the total amount that the shareholders of a company got during the year. It includes the money owed to them at the start of the year in addition to cash paid during the year.

= Beginning dividends payable + Dividends for the year - Ending dividends

= 43,200 + 160,000 - 38,900

= $164,300

8 0
3 years ago
Suppose three companies, Optimax, Megachug, and Thirstoid, dominate the sports drink market. Optimax enjoys the largest market s
mario62 [17]

Answer:

Non-price competition

Explanation:

Non-price competition is when producers use other factors other than the price of their good or service to raise the demand for their product.

Optimax is trying to increase its market share by changing the container for its product. This is non price competition.

Price war is when producers lower the price of their goods in an attempt to increase the demand for their product.

Price leadership is when the dominant firm in an industry sets the market price.

I hope my answer helps you

4 0
3 years ago
Newton, Inc. just paid an annual dividend of $0.95. Their dividends are expected to increase by 4% annually. Newton Company stoc
Eduardwww [97]

Answer:

The required rate of return is 12.2%

Explanation:

Dividend growth model is used to calculate the price of the stock based on the dividend, its growth and required rate of return.

Formula to calculate the price

Price = Dividend / ( Required rate of return - Growth rate )

P = D / ( r - g)

P = $11.54

D = $0.95

g = 4%

Now placing the given values in the formula

$11.54 = $0.95 / ( r - 4% )

r - 4% = $0.95 / $11.54

r - 4% = 8.2%

r = 8.2% + 4%

r = 12.2%

8 0
3 years ago
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