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omeli [17]
2 years ago
11

Abbott Landscaping purchased a tractor at a cost of $29,000 and sold it three years later for $15,700. Abbott recorded depreciat

ion using the straight-line method, a five-year service life, and a $4,000 residual value. Tractors are included in the Equipment account.
Required:
Record the sale of equipment.
Business
1 answer:
Luda [366]2 years ago
7 0

Answer:

Cash                                             15700 Dr

Accumulated depreciation         15000 Dr

   Equipment - Tractor                       29000 Cr

   Gain on sale - Equipment               1700 Cr

Explanation:

The straight line method of depreciation charges a constant depreciation expense per year throughout the useful life of the asset. The formula for depreciation expense under this method is,

Depreciation expense = (Cost - Residual value) / Estimated useful life of the asset

Depreciation expense per year = (29000 - 4000) / 5 = $5000 per year

As the asset was sold after three years, the accumulated depreciation on the asset would be = 5000 * 3 = $15000

The NBV or carrying value of the asset will be = 29000 - 15000 = 14000

The gain on sale of equipment will be = 15700 - 14000 = $1700

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Use the following data to answer QuestionAccounts payable $30,000Accounts receivable 65,000Accrued liabilities 7,000Cash 20,000I
ra1l [238]

Answer:

Current (quick) assets: $195,000

Working capital: $138,000

Explanation:

We can find the correct answer by laying out the information appropriately:

Current Assets:

Accounts Receivable: $65,000

Cash: $20,000

Inventory: $72,000

Marketable securities: $36,000

Prepaid expenses: $2,000

Total: $195,000

Current Liabilities:

Accounts payable: $30,000

Accrued liabilities: $7,000

Notes payable (short-term): $20,000

Total: $57,000

Working capital = current assets - current liabilities

Working capital = $195,000 - $57,000

                           = $138,000

The following accounts mentioned in the question are non-current assets: intangible assets, long-term investments, and property, plant and equipment.

And long-term liabilities, as the name implies, is classified as a non-current liability.

3 0
2 years ago
Hardy Inc. has two operating departments (1 and 2) and is considering renting a new machine to help automate the printing proces
gayaneshka [121]

Answer:

$6,900

Explanation:

When you use the incremental cost allocation method, you must rank cost activities and how they will be allocated. In this case, department 2 is the primary user, and therefore, rental costs must be allocated first to them. Rental costs will be allocated at a $25/hour rate.

Since department 1 is the next user, 100 hours will be allocated using the same rate as department 2, but the next 200 hours will be allocated at the lower $22/hour rate. Total rental cost allocation to department 1 = (100 x $25) + (200 x $22) = $2,500 + $4,400 = $6,900

5 0
3 years ago
Problem 12-04A The income statement of Kingbird, Inc. is presented here. Kingbird, Inc. Income Statement For the Year Ended Nove
barxatty [35]

Answer:

Cash Flow From Operating Activities

Cash Receipt from Customers                       $7,260,000

Cash Paid to Suppliers and Employees       ($6,294,700)

Cash Provided by Operating Activities            $965,300

Explanation:

Step 1 : Cash Paid to Suppliers and Employees Calculation

Cost of goods sold                                         $4,987,300

Add Operating expenses                                $1,120,500

Total                                                                 $6,107,800

Adjustments :

Depreciation expense                                        $95,300

Decrease in Inventory                                     ($536,700)

Increase in Prepaid Expenses                          $179,800

Decrease in Accounts Payable                        $345,700

Decrease in Accrued Expense Payable          $105,800

Cash Paid to Suppliers and Employees       $6,294,700

Step 2 : Cash Receipt from Customers Calculation

Sales revenue                                                $7,465,900

Less Increase in Accounts receivable          ($205,900)

Cash Receipt from Customers                      $7,260,000

4 0
3 years ago
The coupon rate is the rate of interest that the issuer of the bond must pay. (II) The coupon rate is usually fixed for the dura
lyudmila [28]

Answer:

TRUE

Explanation:

The coupon rate for a bond is fixed and is paid by the issuer of the bond to the bondholder. The cash outlay/inflow to the issuer/bondholder is always the same reardless of the market rate.

The effect of the market rate is on the cost to acquire the bond in the secondary market. It do not change the coupon obligation.

3 0
3 years ago
Jared had studied extremely hard for his math test and believed he had understood the material and memorized the formulas. As he
puteri [66]

Answer:

He began to worry.vvv

Explanation:

3 0
3 years ago
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