You are called in to make an examination of the CALEB Company as of December 1,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You are called in to make an examination of the CALEB Company as of December 1, 2015. The Company has been in existence for 6 years and has not been audited before. The books have not been closed. There is only one Machinery account as shown below. The bookkeeper tells you that he has been using a SLM depreciation rate of 20% per year, which was suggested by the manufacturers of the machines. The company policy is to depreciate the machine for the full year's rate in the year of acquisition and none in the year of derecognition. MACHINERY Date 01/04/11 Machine 1 Description Ref Debit Credit VR 1 P 15,000 07/02/11 Machine 2 VR 21 20,000 12/31/11 Depreciation GJ P 7,000 04/01/12 Machine 3 VR 29 60,000 12/31/12 Depreciation GJ 19,000 07/01/13 Machine 4 (Machine 1 traded in; allowance, P10,000, net) VR 38 55,000 12/01/13 Repairs to machine 3 VR 42 1,000 12/31/13 Depreciation GJ 27,200 06/12/14 Major overhaul of Machine ? VR 48 8,000 07/01/14 Automatic control put on machine 4 VR 51 18,000 10/01/14 Soldmachine 3 CR 5,000 12/31/14 Depreciation GJ 20,400 12/31/14 Depreciation 20,400 07/01/15 Sold Machine 4 CR 14,000 12/31/15 Depreciation GJ 5,800 The fair market value of machine 2 is P10,000 while it value in use is equal to its book value. Required: 1. Compute for the following: a. Gain or loss on trade-in of Machine 1 b. Gain or loss on sale of machine 3 c. Gain or loss on sale machine 4 d. Net book value of machine 2 as of December 31,2015 e. Adjusted balance of the machinery account as of December 31,2015 2. Adjusting Journal Entries You are called in to make an examination of the CALEB Company as of December 1, 2015. The Company has been in existence for 6 years and has not been audited before. The books have not been closed. There is only one Machinery account as shown below. The bookkeeper tells you that he has been using a SLM depreciation rate of 20% per year, which was suggested by the manufacturers of the machines. The company policy is to depreciate the machine for the full year's rate in the year of acquisition and none in the year of derecognition. MACHINERY Date 01/04/11 Machine 1 Description Ref Debit Credit VR 1 P 15,000 07/02/11 Machine 2 VR 21 20,000 12/31/11 Depreciation GJ P 7,000 04/01/12 Machine 3 VR 29 60,000 12/31/12 Depreciation GJ 19,000 07/01/13 Machine 4 (Machine 1 traded in; allowance, P10,000, net) VR 38 55,000 12/01/13 Repairs to machine 3 VR 42 1,000 12/31/13 Depreciation GJ 27,200 06/12/14 Major overhaul of Machine ? VR 48 8,000 07/01/14 Automatic control put on machine 4 VR 51 18,000 10/01/14 Soldmachine 3 CR 5,000 12/31/14 Depreciation GJ 20,400 12/31/14 Depreciation 20,400 07/01/15 Sold Machine 4 CR 14,000 12/31/15 Depreciation GJ 5,800 The fair market value of machine 2 is P10,000 while it value in use is equal to its book value. Required: 1. Compute for the following: a. Gain or loss on trade-in of Machine 1 b. Gain or loss on sale of machine 3 c. Gain or loss on sale machine 4 d. Net book value of machine 2 as of December 31,2015 e. Adjusted balance of the machinery account as of December 31,2015 2. Adjusting Journal Entries
Expert Answer:
Answer rating: 100% (QA)
To compute the required figures lets analyze each transaction 1 Gain or loss on tradein of Machine 1 ... View the full answer
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
Students also viewed these accounting questions
-
How can leaders promote integrity through inclusive and equitable practices, addressing systemic biases, discrimination, and social injustices to create a more inclusive and socially responsible...
-
Triad Corporation has established a joint venture with Tobacco Road Construction, Inc., to build a toll road in North Carolina. The initial investment in paving equipment is $177 million. The...
-
CANMNMM January of this year. (a) Each item will be held in a record. Describe all the data structures that must refer to these records to implement the required functionality. Describe all the...
-
Which of the following options are available for creating a policy in Qualys Policy Compliance? (Choose three) A, Create from Host B, Create from Scratch C, Import from Library D, Import from CSV File
-
The National Association of Realtors released a survey indicating that a surprising 43% of first-time home buyers purchased their homes with no- money-down loans during the time before the housing...
-
A preference relation (section 1.6) on a cone S is said to be homothetic if x1 ~ x2 ) tx1~ tx2 for every x1, x2 S and t > 0 Show that a continuous preference relation is homothetic if and only if...
-
If a company uses the cost-based approach to trans- fer pricing, should it use actual cost or standard cost? Explain your answer.
-
Harvest Cereals produces a wide variety of breakfast products. The companys three best-selling breakfast cereals are Double Bran Bits, Honey Wheat Squares, and Sugar King Pops. Each box of a...
-
4. Given: U is the midpoint of EL and JI L List 3 parts E ALUI A by
-
In a machine component the state of stress at a critical region is given below. The yield strength is 300 MPa, ultimate strength is 400 MPa and Poisons ratio is 0.28 for the material. Compare the...
-
maturity years to maturity ask price calculated yield 5/15/2013 1 99.883 0.001171371 5/15/2014 2 99.387 0.003079164 5/15/2015 3 98.606 0.004690323 5/15/2016 4 97.163 0.007220998 5/15/2017 5 95.412...
-
Analyze the various seismic retrofitting techniques used to upgrade existing buildings and infrastructure. How do these techniques balance the need for structural integrity with the constraints of...
-
Maribel: Strategies and Adaptations to Ensure Engagement (Total Points = 35) Part 1 - Description of Child: Read only. Maribel is a 5-year old girl with Down Syndrome which causes her to have a mild...
-
A particle (mass = 2.0 mg, charge = -6.0 C) moves in the positive direction along the x axis with a velocity of 3.0 km/s. It enters a magnetic field of (2.0i + 3.0j + 4.0k) mT. What is the...
-
Suppose a monopolist firm has the following normal demand function: Q = 30-0.2P. The firm's total cost function is given by: TC = 50+ 10Q + 3Q. Use this information to answer questions in Part A...
-
Leverage Value HI: when 40 observations and 4 variables are used, what is the limit
-
Calculate the change in entropy when 100 kJ of energy is transferred reversibly and isothermally as heat to a large block of copper at (i) 0 C, (ii) 50 C.
-
Prepare a statement of estimated cash receipts and disbursements for October 2007 for the Aquarius Company, which sells one product, herbal soap, by the case. On October 1, 2007, part of the trial...
-
Computer Superstores Inc. has a strong belief in using highly decentralized management. You are the new manager of one of its small computer boutiques. You know a great deal about how to buy, how to...
-
Daphne Kite Company wants a master budget for the next three months, beginning January 1, 2008. It desires an ending minimum cash balance of $5,000 each month. Sales are forecasted at an average...
Study smarter with the SolutionInn App