Question: Iris Company purchased land and a building on January 1
Iris Company purchased land and a building on January 1, 2014. Management’s best estimate of the value of the land was $100,000 and of the building $250,000. How-ever, management told the accounting department to record the land at $230,000 and the building at $120,000. The building is being depreciated on a straight-line basis over 20 years with no salvage value. Why do you suppose management requested this accounting treatment? Is it ethical?
Answer to relevant QuestionsOn January 1, 2014, the Ferman Company ledger shows Equipment $36,000 and Accumulated Depreciation $13,600. The depreciation resulted from using the straight-line method with a useful life of 10 years and a salvage value of ...Downs Company purchases a patent for $156,000 on January 2, 2014. Its estimated useful life is 6 years.(a) Prepare the journal entry to record amortization expense for the first year.(b) Show how this patent is reported on ...The following expenditures relating to plant assets were made by Watkens Company during the first 2 months of 2014. 1. Paid $7,000 of accrued taxes at the time the plant site was acquired. 2. Paid $200 insurance to cover a ...Suppose during 2014 that Federal Express reported the following information (in millions): net sales of $35,497 and net income of $98. Its balance sheet also showed total assets at the beginning of the year of $25,633 and ...Presented here are selected transactions for Pine Company for 2014.Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $71,000 on that date and had a useful life of 10 years with no ...
Post your question