On January 1, 20X1, ABC Company purchased a machine for use in its factory. ABC started...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 20X1, ABC Company purchased a machine for use in its factory. ABC started using the machine on February 1, 20X1. During 20X1, ABC spent the following on the machine and on expenditures related to the machine: Description Purchase price including sales tax Amount $200,000 Shipping cost from supplier to ABC's factory 1,000 Cost to build a platform in ABC's factory to support the weight of the machine 30,000 Cost to hire expert to calibrate machine prior to first use - necessary to ensure machine works properly 5,000 Cost to replace fan belts and service machine after 9 months of use - required every 9 months to ensure machine operates as intended 2,000 1. Calculate the value in the machine asset account on February 1, 20X1. 2. Assume that ABC uses the units of production method of depreciation and the machine has a book value of $100,000 on December 31, 20X3. On January 1, 20X4, ABC sells the machine for $80,000 cash and purchases a newer higher capacity machine. Calculate the accounting gain or loss on the sale. Enter a loss in brackets. 3. Consider the impact of the sale in #2 on the 20X4 statement of cash flows: a. In what section of the 20X4 Statement of Cash Flow does the sale appear? b. What is the amount of cash inflow or outflow shown in the section identified in 3a on the 20X4 Statement of Cash Flows (inflow is positive, outflow is negative in brackets)? On January 1, 20X1, ABC Company purchased a machine for use in its factory. ABC started using the machine on February 1, 20X1. During 20X1, ABC spent the following on the machine and on expenditures related to the machine: Description Purchase price including sales tax Amount $200,000 Shipping cost from supplier to ABC's factory 1,000 Cost to build a platform in ABC's factory to support the weight of the machine 30,000 Cost to hire expert to calibrate machine prior to first use - necessary to ensure machine works properly 5,000 Cost to replace fan belts and service machine after 9 months of use - required every 9 months to ensure machine operates as intended 2,000 1. Calculate the value in the machine asset account on February 1, 20X1. 2. Assume that ABC uses the units of production method of depreciation and the machine has a book value of $100,000 on December 31, 20X3. On January 1, 20X4, ABC sells the machine for $80,000 cash and purchases a newer higher capacity machine. Calculate the accounting gain or loss on the sale. Enter a loss in brackets. 3. Consider the impact of the sale in #2 on the 20X4 statement of cash flows: a. In what section of the 20X4 Statement of Cash Flow does the sale appear? b. What is the amount of cash inflow or outflow shown in the section identified in 3a on the 20X4 Statement of Cash Flows (inflow is positive, outflow is negative in brackets)?
Expert Answer:
Answer rating: 100% (QA)
Calculating Machine Asset Value and GainLoss on Sale 1 Value in the machine asset account o... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
Posted Date:
Students also viewed these finance questions
-
The following questions are adapted from a variety of sources including questions developed by the AICPA Board of Examiners and those used in the Kaplan CPA Review Course to study property, plant,...
-
Build Right Supply, Co., shows the following financial statement data for 2014, 2015, and 2016. Prior to issuing the 2016 statements, auditors found the ending inventory for 2014 was understated by...
-
Explain the differences between an enterprise data model and a conceptual data model. How many databases does each represent? What scope of the organization does each address? What are other salient...
-
1. What's the problem at WCBA? 2. Using SLII as a basis, what would you advise Ann to do differently at the station? 3. Based on Situational Leadership, what creative schemes could Ann use to reduce...
-
In Figure 9.2, there is a striped area in the right-hand part of the curve. a. What does that area represent? b. If you tested the research hypothesis at a more rigorous level (say at .01 rather than...
-
Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of...
-
Modify create_search_query in sql_injection.py How can the "create_search_query" function be modified to prevent SQL injection. For example, how do I prevent SQL statements like VISA%" OR "1" LIKE...
-
Question 1 By integrating up Gauss's equation, we showed in Examples Class 7 that on the p-type side of the junction, the electric field is given by: N se E=- (x+W) and that on the n-type side it is...
-
Plot Ka as a function of the absorption edge and see if there is any likely trend. (Table 21-2.) Try and explain the trend(s) if you find any. Table 21-2 Characteristic emission lines and absorption...
-
Suppose you have made the eight runs in the 2 5-2 design in Problem 8-4. What additional runs would be required to identify the factor effects that are of interest? What are the alias relationships...
-
Suppose that in Problem 5-11 the furnace positions were randomly selected, resulting in a mixed model experiment. Reanalyze the data from this experiment under this new assumption. Estimate the...
-
Reconsider the experiment in Problem 5-22. Use the Box-Cox procedure to determine if a transformation on the response is appropriate (or useful) in the analysis of the data from this experiment....
-
In the grill defects experiment described in Problem 8-29, a variation of the square root transformation was employed in the analysis of the data. Use the Box-Cox method to determine if this is the...
-
Analyze a social situation from your own life using Goffmans dramaturgical analysis (use specific terminology). How would Goffman analyze the self in your example?
-
On 1 July 2021, Croydon Ltd leased ten excavators for five years from Machines4U Ltd. The excavators are expected to have an economic life of 6 years, after which time they will have an expected...
-
Entrepreneur magazine ranks franchises. Among the factors that the magazine uses in its rankings are growth rate, number of locations, start-up costs, and financial stability. A recent ranking listed...
-
The following 20 observations are for two quantitative variables, x and y. a. Create a scatter chart for these 20 observations. b. Fit a linear trendline to the 20 observations. What can you say...
-
The file colleges contains the following data for the sample of 102 private colleges: year founded, tuition and fees (not including room and board), and the percentage of undergraduates who obtained...
Study smarter with the SolutionInn App