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accounting principles volume 2
Accounting Principles Volume 2 9th Canadian Edition Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak - Solutions
Becky Sherrick’s regular hourly wage rate is $15.00, and she is paid time and a half for work over 40 hours per week. In the pay period ended March 16, Becky worked 46 hours. Becky’s CPP deductions total $36.39, EI deductions total $11.61, and her income tax withholdings are $92.40. (a)
A list of possible liabilities follows: 1. An automobile company recalled a particular car model because of a possible problem with the brakes. The company will pay to replace the brakes. 2. A large retail store has a policy of refunding purchases to dissatisfied customers under a widely
Sleep-a-Bye Baby Company, a public company, is the defendant in a lawsuit alleging that its portable baby cribs are unsafe. The company has offered to replace the cribs free of charge for any concerned parent. Nonetheless, it has been sued for damages and distress amounting to $1.5 million. The
Bri Company’s gross pay for the week ended August 22 totalled $70,000, from which $3,815 was deducted for CPP, $1,106 for EI, and $19,360 for income tax. Prepare the entry to record the employer payroll costs, assuming these will not be paid until September.
Hidden Dragon Restaurant’s gross payroll for April is $46,600. The company deducted $2,540 for CPP, $736 for EI, and $9,011 for income taxes from the employees’ cheques. Employees are paid monthly at the end of each month. Instructions a. Prepare a journal entry for Hidden Dragon on
Swenson Company has these payroll procedures: a. A supervisor approves overtime work. b. The human resources department prepares hiring authorization forms for new hires. c. A second payroll department employee verifies payroll calculations. d. The treasurer’s department pays
Diamond Dealers has two notes payable outstanding on December 31, 2024, as follows: a. A five-year, 5.5%, $60,000 note payable issued on August 31, 2024. Diamond Dealers is required to pay $12,000 plus interest on August 31 each year starting in 2025. b. A four-year, 4.5%, $96,000 note
Identify which of the following items should be classified as a current liability. For those that are not current liabilities, identify where they should be classified. a. A product warranty b. Cash received in advance for airline tickets c. HST collected on sales d. Bank
To whom, and how often, are payroll deductions remitted?
Kate Gough’s regular hourly wage rate is $22.05, and she receives a wage of 1.5 times the regular hourly rate for work over 40 hours per week. Assuming June 15, 2021 is a Friday, Kate worked 44 hours for the pay period ended June 15, 2021. Kate lives in Ontario and has a claim code of 1 for tax
In 2021, Donald Green worked for the Green Red Company and earned a gross salary of $57,000 for the year ($4,750 per month). He was paid once a month at the end of each month. Instructions Calculate Donald’s CPP and EI deductions for the following: a. September 2021 b. October
Rikard’s Menswear sells $4,750 of gift cards for cash in December 2024. Rikard’s has a December 31 fiscal year end and uses a perpetual inventory system. In January 2025, $2,425 of the gift cards are redeemed for merchandise with a cost of $1,070. Prepare journal entries for Rikard’s for
The following selected account balances are from LightHouse Distributors’ adjusted trial balance at September 30, 2024:Accounts payable
Medlen Models has the following account balances at December 31, 2024:Notes payable ($60,000 due after Dec. 31, 2025) ................................ $100,000Unearned revenue.....................................................................................
Emerald Enterprises has three notes payable outstanding on December 31, 2024, as follows: 1. A six-year, 6%, $60,000 note payable issued on March 31, 2024. Emerald Enterprises is required to pay $10,000 plus interest on March 31 each year starting in 2025. 2. A seven-month, 4%, $30,000
On August 1, 2024, Tundra Trees signed a seven-month, 6%, $50,000 note payable with Canada Bank. Interest is due at maturity. Tundra Trees has a December 31 fiscal year end. Tundra honours the note at maturity. Instructions For Tundra Trees, record all transactions related to the note.
On June 1, 2024, Novack Company purchases equipment on account from Moleski Manufacturers for $50,000. Novack is unable to pay its account on July 1, 2024, so Moleski agrees to accept a three-month, 7% note payable from Novack. Interest is payable the first of each month, starting August 1, 2024.
In this collaborative learning activity, your group must decide on the best accounting treatment for a contingency. Your instructor will provide the class with a scenario and each group will be required to decide if an accrual should be made and, if so, for how much. Groups will simultaneously
The following expenditures related to property, plant, and equipment were made by Pascal Company: 1. Paid $400,000 for a new plant site. 2. Paid $5,000 in legal fees on the purchase of the plant site. 3. Paid $7,500 for grading the plant site. 4. Paid $4,800 to demolish an old
Hohenberger Farms purchased real estate for $1,280,000, which included $5,000 in legal fees. It paid $255,000 cash and incurred a mortgage payable for the balance. The real estate included land that was appraised at $476,000, a building appraised at $748,000, and fences and other land improvements
Air Canada is Canada’s largest domestic, U.S. transborder, and international airline. Air Canada serves virtually every major market in the world through its global route network. The following is a partial extract from its December 31, 2020, notes to the financial
Surkis Company incurs the following costs in purchasing equipment: invoice price, $40,375; shipping, $625; installation and testing, $1,000; one-year insurance policy, $1,750. What is the cost of the equipment?
On June 9, 2023, Blue Ribbon Company purchased manufacturing equipment at a cost of $345,000. Blue Ribbon estimated that the equipment will produce 600,000 units over its five-year useful life, and have a residual value of $15,000. The company has a December 31 fiscal year end and has a policy of
Rainbow Company purchased land, a building, and equipment on January 2, 2024, for $850,000. The company paid $170,000 cash and signed a mortgage note payable for the remainder. Management’s best estimate of the value of the land was $352,000; of the building, $396,000; and of the equipment,
Yello Bus Lines uses the units-of-production method in depreciating its buses. One bus was purchased on January 1, 2024, at a cost of $148,000. Over its four-year useful life, the bus is expected to be driven 100,000 kilometers. Residual value is expected to be $8,000. Instructions a.
Jacques asks why the total cost in a basket purchase has to be allocated to the individual assets. For example, if we purchase land and a building for $250,000, why can we not just debit an account called Land and Building for $250,000? Answer his question.
On April 22, 2023, Sandstone Enterprises purchased equipment for $129,200. The company expects to use the equipment for 12,000 working hours during its four-year life and that it will have a residual value of $14,000. Sandstone has a December 31 year end and pro-rates depreciation to the nearest
Corales Company acquires network equipment at a cost of $38,000 on May 1, 2024. The equipment is expected to have a residual value of $6,000 at the end of its four-year useful life. Assuming the diminishing-balance method is used at a rate of 30%, calculate the annual depreciation expense for 2025
Bisor Company has a December 31 year end and uses straight-line depreciation for all property, plant, and equipment. On July 1, 2022, the company purchased equipment for $500,000. The equipment had an expected useful life of 10 years and no residual value. The company uses the nearest month method
Speedy Taxi Service uses the units-of-production method in calculating depreciation on its taxicabs. Each cab is expected to be driven 550,000 km. Taxi 10 cost $38,950 and is expected to have a residual value of $4,300. Taxi 10 is driven 90,000 km in 2023 and 135,000 km in 2024. Calculate (a)
Refer to the data given for Pandora Pants Company in BE9.9. Assume now that the company has a policy of recording a half year’s depreciation in the year of acquisition and a half year’s depreciation in the year of disposal. Using the double diminishing-balance method, calculate the depreciation
On October 1, 2022, Chignecto Manufacturing Company purchased a piece of high-tech equipment for $90,000 cash. Chignecto estimated the equipment would have a six-year useful life and a residual value of $9,000. The company uses straight-line depreciation and has a September 30 fiscal year end. On
Cherry Technology purchased equipment on January 4, 2022, for $250,000. The equipment had an estimated useful life of six years and a residual value of $10,000. The company has a December 31 year end and uses straight-line depreciation. On December 31, 2024, the company tests for impairment and
The following are some transactions of Surendal Company for 2024. Surendal Company uses straight-line depreciation and has a December 31 year end.Apr. 1 Retired a piece of equipment that was purchased on January 1, 2015, for $45,000. The equipment had an expected useful life of 10 years with no
On January 2, 2024, Ares Enterprises reports balances in the Equipment account of $32,000 and Accumulated Depreciation—Equipment account of $9,000. The equipment had an original residual value of $2,000 and a 10-year useful life. Ares uses straight-line depreciation for equipment. On this date,
Plessis Company owns equipment that cost $65,000 when purchased on January 2, 2024. It has been depreciated using the straight-line method based on estimated residual value of $5,000 and an estimated useful life of five years. Instructions Prepare Plessis Company’s journal entries to
Rivers Mining Company has a December 31 fiscal year end. The following information relates to its Golden Grove mine: 1. Rivers purchased the Golden Grove mine on March 31, 2023, for $2.6 million cash. On the same day, modernization of the mine was completed at a cash cost of $260,000. It is
On January 3, 2024, Ruiz Company retires equipment, which cost $25,700. No residual value is received. Prepare journal entries to record the transaction if accumulated depreciation is also $25,700 on this equipment. Ruiz has a December 31 fiscal year end.
In the fourth year of an asset’s five-year useful life, the company decides that the asset will have an eight-year service life. How should the revision of depreciation be recorded? Why?
On July 1, 2024, Phillips Exploration invests $1.3 million in a mine that is estimated to have 800,000 tonnes of ore. The company estimates that the property will be sold for $100,000 when production at the mine has ended. During the last six months of 2024, 100,000 tonnes of ore are mined and
Wilbur Company sells equipment on March 31, 2024, for $35,000 cash. The equipment was purchased on January 5, 2021, at a cost of $86,400, and had an estimated useful life of five years and a residual value of $2,200. Wilbur Company uses straight-line depreciation for equipment. Adjusting journal
An accounting student encountered the following situations at Chin Company: 1. During the year, Chin Company purchased land and paid legal fees on the purchase. The land had an old building, which was demolished. The land was then cleared and graded. Construction of a new building will start
Karsch Enterprises has a December 31 fiscal year end and uses straight-line amortization to the nearest month for its finite-life intangible assets. The company has provided you with the following information related to its intangible assets and goodwill during 2023 and 2024: 2023Jan. 9
Cuono Mining Co. purchased a mine for $6.5 million that is estimated to have 25 million tonnes of ore and a residual value of $500,000. In the first year, 5 million tonnes of ore are extracted and 3 million tonnes are sold. Record annual depletion for the first year, ended August 31, 2024.
How is a gain or loss on the sale of an item of property, plant, or equipment calculated? Is the calculation the same for an exchange of a piece of property, plant, or equipment?
Whiteway Company has a December 31 fiscal year end. Selected information follows for Whiteway Company for two independent situations as at December 31, 2024: 1. Whiteway purchased a patent from Hopkins Inc. for $400,000 on January 1, 2021. The patent expires on January 1, 2029. Whiteway has
Francoeur Mining Co. purchased for $7 million a mine that is estimated to have 35 million tonnes of ore and no salvage value. In the first year, 5 million tonnes of ore are extracted. a. Prepare the journal entry to record depletion for the first year. b. Show how this mine is reported on
Linton Company purchased a delivery truck for $34,000 on January 1, 2024. The truck has an expected residual value of $2,000, and is expected to be driven 100,000 kilometres over its estimated useful life of eight years. Actual kilometres driven were 15,000 in 2024 and 12,000 in
Mabasa Company purchases a patent for $150,000 cash on January 2, 2024. Its legal life is 20 years and its estimated useful life is 8 years. a. Record the purchase of the patent on January 2, 2024. b. Record amortization expense for the year ended December 31, 2024.
Suncor Energy Inc. reported the following information for the fiscal years ended December 31, 2019, and December 31, 2018 (in millions): Instructions a. Calculate Suncor’s asset turnover and return on assets for the two years. b. Comment on what the ratios reveal about Suncor’s
Campanez Company purchases a patent for $140,000 on January 2, 2024. Its estimated useful life is 10 years. a. Prepare the journal entry to record amortization expense for the first year.b. Show how this patent is reported on the balance sheet at the end of the first year.
Why is the units-of-production method used frequently to calculate depletion for natural resources?
Information related to property, plant, and equipment; natural resources; and goodwill on December 31, 2024, for H. Dent Company is as follows: land $400,000, building $1,100,000, accumulated depreciation—building $600,000, goodwill $410,000, nickel mine $500,000, and accumulated
A global provider of crop inputs and services headquartered in Saskatoon, reports the following in its 2019 financial statements (in millions of US$):“Sales” can be used in place of “Net sales” and “Net earnings” can be used in place of “Profit” in your ratio
How should long-lived assets be reported on the balance sheet and income statement? What information should be disclosed in the notes to the financial statements?
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