1. A metal box of weigh 20 N rests on its 1 m by 0.6m side on floor. How

Babcock Company purchased a piece of machinery for $36,000 on January 1, 2019, and has been depreciating the machine using the s

pogonyaev

Answer:

Requirement 1:

Dr Accumulated Depreciation $9,600

Cr Retained Earnings Account $9,600

Requirement 2:

Dr Depreciation Expense $6,000

Cr Accumulated Depreciation $6,000

Explanation:

Year Remaining Life of machine Depreciation fraction

1 5 5/15

2 4 4/15

3 3 3/15

4 2 2/15

5 1 1/15

Total 15

Now here, the depreciation formula is as under:

Depreciation expense = (Cost - Salvage Value) * Fraction value

Year 2019:

The sum of years digit fraction would be 5/15 and the cost of the machinery is $36,000. So

Depreciation Expense = ($36,000 - 0) * 5/15 = $12,000

Year 2020:

The sum of years digit fraction would be 5/15 and the cost of the machinery is $36,000. So

Depreciation Expense = ($36,000 - 0) * 4/15 = $9,600

Year 2021:

Now in this year the there is change in estimate and a switch in the use of the depreciation method, which is now straight line method. The change in estimate only includes the useful life of the asset which is 6 years from the date of purchase.

So for straight-line depreciation:

Depreciation Expense = (Cost - Salvage Value) / Useful Life

By simply putting values, we have:

Depreciation Expense = $36,000 / 6 years = $6,000 per year

So this means, according to change in accounting policy, the excess depreciation charged must be eliminated from the previous years. The depreciation charge for the previous 2 years must be $12,000 and the excess depreciation charge is calculated as under:

Carrying value of the asset = $21,600 - $12,000 = $9,600

Requirement 1:

The double entry according to the US GAAP, for the excess depreciation charge in the previous years would be the waiving off of retained earnings with the excess depreciation amount calculated above.

Dr Accumulated Depreciation $9,600

Cr Retained Earnings Account $9,600

Requirement 2:

The depreciation expense for the year 2021, would be recorded as under:

Dr Depreciation Expense $6,000

Cr Accumulated Depreciation $6,000

3 0

4 years ago

Waterway Co. purchased land as a factory site for $536,000. The process of tearing down two old buildings on the site and constr

geniusboy [140]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.

Download xlsx

5 0

3 years ago

Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price

Bad White [126]

Answer:

a. 10.60%

b. 3.53%

Explanation:

a. Calculate the yield on the repo if it has a 5-day maturity.

Profit = $34,000,000 − $33,950,000 = $50,000

Using 360 days a year, we have:

Yield on the repo = ($50,000/$33,950,000)*(360/5) = 0.1060, or 10.60%

b. Calculate the yield on the repo if it has a 15-day maturity.

Using 360 days a year also, we have:

Yield on the repo = ($50,000/$33,950,000)*(360/15) = 0.0353, or 3.53%

3 0

3 years ago

Which of the following is similar to a spreadsheet?

NNADVOKAT [17]

Answer:

Can you add a picture?

Explanation:

7 0

3 years ago

When the United States imports more than it exports, then the balance of payments would record a negative entry in the financial

wel

Answer:

The answer is B a negative entry in the current account.

Explanation:

Balance of payments accounts of a country is the recording economic transactions (the payments and receipts) of the residents of the country with residents of other countries during a period of time.

Balance of Payments is in deficit or negative if imports are more than the exports and it is in surplus or positive if exports are more than imports during a period of time.

We have three categories of Balance of Payments:.

1. The current account which records the inflow and outflow of goods and services.

2. The Financial account which records

monetary flow like investment in real estates, fixed income(bonds), stocks etc.

3. The capital account which records the investments in fixed assets like land.

6 0

3 years ago