Sky Line Co. is a manufacturer of escalators and elevators. The following provides information on two...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sky Line Co. is a manufacturer of escalators and elevators. The following provides information on two types of property, plant, and equipment as at the end of fiscal year 2020. (Click the icon to view the data.) Required Requirement a. Using the information in the problem statement, compute the depreciation that would be recorded on each of the two assets for 2021. Do not use the information in any of the subsequent requirements of this problem. Assembly-line equipment 2021 Depreciation Requirement b. At the beginning of fiscal year 2021, Sky Line conducted appraisals of these assets. The appraisals indicate that the factory building is worth $7.5 million while the equipment is worth $3,360,000. While the company has conducted regular appraisals in the past, these are the first appraisals to show significant deviations of fair value from carrying value. In other words, there have been no revaluation surpluses or losses on these assets prior to 2021. For the revaluation on the equipment, the company has chosen to use the proportional method. For the building, the company will use the elimination method. Record the journal entries to revalue these two assets at the beginning of 2021. Date 2021 Begin by recording the journal entry for the revaluation adjustment on the equipment using the proportional method. (Record debits first, then credits. Explanations are not required.) Date 2021 Factory building Accounts Accounts Now record the journal entry for the revaluation adjustment on the building using the elimination method. (Record debits first, then credits. Explanations are not required.) Debit 2021 Depreciation (assuming revaluation at the start of 2021) Credit Debit Credit Requirement c. Using the amounts after revaluation, compute the depreciation that would be recorded on each of the two assets for 2021. Assembly-line Factory equipment building Cost Estimated residual value Estimated useful life on purchase date Remaining useful life at the end of fiscal 2020 Depreciation policy Accumulated depreciation at end of 2020 Assembly-line equipment $7,200,000 nil 12 years 8 years Straight-line $2,400,000 Factory building $10,800,000 $800,000 25 years 10 years Straight-line $6,000,000 Requirement d. At the beginning of fiscal year 2022, Sky Line conducted another appraisal, which showed a value of $5.3 million for the building and $3,175,200 for the equipment. For consistency of accounting policies, the company must use the same revaluation policies as in 2021 (see requirement b above). Record the journal entries to revalue these two assets at the beginning of 2022. Begin by recording the journal entry for the 2022 revaluation adjustment on the equipment using the proportional method. (Record debits first, then credits. Explanations are not required. Round any interim percentage calculations to five decimal places, X.XXXXX%, and round your final answers to the nearest dollar.) Accounts Debit Credit Date 2022 Finally, record the journal entry for the 2022 revaluation adjustment on the building using the elimination method. (Record debits first, then credits. Explanations are not required.) Date 2022 Accounts Debit Credit Sky Line Co. is a manufacturer of escalators and elevators. The following provides information on two types of property, plant, and equipment as at the end of fiscal year 2020. (Click the icon to view the data.) Required Requirement a. Using the information in the problem statement, compute the depreciation that would be recorded on each of the two assets for 2021. Do not use the information in any of the subsequent requirements of this problem. Assembly-line equipment 2021 Depreciation Requirement b. At the beginning of fiscal year 2021, Sky Line conducted appraisals of these assets. The appraisals indicate that the factory building is worth $7.5 million while the equipment is worth $3,360,000. While the company has conducted regular appraisals in the past, these are the first appraisals to show significant deviations of fair value from carrying value. In other words, there have been no revaluation surpluses or losses on these assets prior to 2021. For the revaluation on the equipment, the company has chosen to use the proportional method. For the building, the company will use the elimination method. Record the journal entries to revalue these two assets at the beginning of 2021. Date 2021 Begin by recording the journal entry for the revaluation adjustment on the equipment using the proportional method. (Record debits first, then credits. Explanations are not required.) Date 2021 Factory building Accounts Accounts Now record the journal entry for the revaluation adjustment on the building using the elimination method. (Record debits first, then credits. Explanations are not required.) Debit 2021 Depreciation (assuming revaluation at the start of 2021) Credit Debit Credit Requirement c. Using the amounts after revaluation, compute the depreciation that would be recorded on each of the two assets for 2021. Assembly-line Factory equipment building Cost Estimated residual value Estimated useful life on purchase date Remaining useful life at the end of fiscal 2020 Depreciation policy Accumulated depreciation at end of 2020 Assembly-line equipment $7,200,000 nil 12 years 8 years Straight-line $2,400,000 Factory building $10,800,000 $800,000 25 years 10 years Straight-line $6,000,000 Requirement d. At the beginning of fiscal year 2022, Sky Line conducted another appraisal, which showed a value of $5.3 million for the building and $3,175,200 for the equipment. For consistency of accounting policies, the company must use the same revaluation policies as in 2021 (see requirement b above). Record the journal entries to revalue these two assets at the beginning of 2022. Begin by recording the journal entry for the 2022 revaluation adjustment on the equipment using the proportional method. (Record debits first, then credits. Explanations are not required. Round any interim percentage calculations to five decimal places, X.XXXXX%, and round your final answers to the nearest dollar.) Accounts Debit Credit Date 2022 Finally, record the journal entry for the 2022 revaluation adjustment on the building using the elimination method. (Record debits first, then credits. Explanations are not required.) Date 2022 Accounts Debit Credit
Expert Answer:
Answer rating: 100% (QA)
Solution 2021 Depreciation Equipment Building Cost 7200000 10800000 Estimated residual ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Tip Top Co. is a manufacturer of escalators and elevators. The following provides information on two types of property, plant, and equipment as at the end of fiscal year 2020. (Click the icon to view...
-
Uplifting Co. is a manufacturer of escalators and elevators. The following provides information on two types of property, plant, and equipment as at the end of fiscal year 2012: Required: a. Using...
-
Chromalox Instruments and Controls, located in LaVergne, Tennessee, is a manufacturer of industrial process controllers, monitors, and industrial and military control panels. Chromalox products are...
-
There is a bond on the spot-market. Price is 87.63 USD. Risk-free interest rate is 1.22%. The forward-price is 102.78 USD. Is there any arbitrage possibility if time to maturity is 9 months?
-
At which points in the revenue cycle are independent verification controls necessary?
-
Describe three approaches to organizing programming teams. For what types of projects or development activities is each approach best suited?
-
Essence of Skunk Fragrances, Ltd., sells 2,000 units of its perfume collection each year at a price per unit of \($600.\) All sales are on credit with terms of 2/10, net 30. The discount is taken by...
-
Lita Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations. a. Lita Lopez invests $70,000 cash and office equipment valued at...
-
To Tell or Not to Tell: An Auditing Case in Ethical Decision Making and Conflict Resolution Mary Thomas Keim and C. Terry Grant Address each of the following from the context of the impact on your...
-
Top Quality Appliance-Long Beach has just purchased a franchise from Top Quality Appliance (TQA). TQA is a manufacturer of kitchen appliances. TQA markets its products via retail stores that are...
-
P1 24 P2 13 P3 A 21 B' B' 1 B' 31 B 51 21 B 31 P4 ' 31 P5 55 41 D A 0 0 ' B Given: 7, 0=0, & = 30%. Determine: the velocities and the accelerations of the points A, B, C, A', B', C'. E -00 Given: 1,,...
-
Using your own words, discuss reasons why a firm would adopt target costing. Using your own words, discuss three methods used to allocate costs from supporting departments to operating departments....
-
Answer questions based on each of the following scenarios. You will specifically find it helpful to review the contents of negligence law, contract law, and business forms: --- Scenario 1 Casey is 19...
-
Creating a 30-second Radio Advertisement Script Direction: Develop a 30-second radio advertisement script about the Louis Vuitton Brand. Then, provide a brief paragraph description of what will take...
-
Run Company produces a variety of products in its large production facility. The company uses a just-in-time approach and only keeps about four hours' worth of inventory of all input materials. The...
-
Given the fixed beam shown in the figure below (Fig Q10) solve the following problem. Using three (3) elements of equal length calculate the displacement w, given the following parameters. 3 1. The...
-
James company buys and sells debt securities which it classifiesas trading securities. The company's fiscal year ends on December31. On December 27, 2022, James purchases Today communicationsbonds 2...
-
6. (Potential Energy and Conservation of Energy) What should be the spring constant k of a spring designed to bring a 1200-kg car to rest from a speed of 95 km/h so that the occupants undergo a...
-
The following is the complete mineral exploration, development, and extraction history of Nikko Minerals Inc. Early in 2009 investors invested $50 million to start the company. No further or other...
-
You serve as a volunteer treasurer for your local hockey club. The club plans to hold a costume party on Halloween night to help raise funds for the team to travel to an out-of town tournament. You...
-
The IFRS Conceptual Framework, paragraph 37, indicates the following relating to the principle of conservatism or prudence: The preparers of financial statements ... have to contend with the...
-
Safeway, Inc. is a large food and drug retailer with more than 1,700 stores in the U.S. and Canada. The following financial information relates to fiscal 2009 and 2008. Required Calculate inventory...
-
Comparative income statements for Cramer Carpets, a carpet retailer, are given below: The president is concerned that net income is down in 2009 even though sales have increased during the year. The...
-
Comparative financial statements for the Rahul Corporation for the year ended December 31 are given below. A total of 500,000 shares of stock were outstanding. The market value of the company's stock...
Study smarter with the SolutionInn App