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intermediate accounting reporting

Intermediate Accounting 16th Edition Donald E. Kieso - Solutions

(L06) (Term Modification without Gain—Creditor’s Entries) Using the same information as in E14-22, answer the following questions related to American Bank (creditor).Instructions(a) What interest rate should American Bank use to calculate the loss on the debt restructuring?(b) Compute the loss
(L06) (Term Modification without Gain—Debtor’s Entries) On December 31, 2017, American Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,000,000 note receivable by the
(L06) (Settlement of Debt) Strickland Company owes $200,000 plus $18,000 of accrued interest to Moran State Bank.The debt is a 10-year, 10% note. During 2017, Strickland’s business deteriorated due to a faltering regional economy. On December 31, 2017, Moran State Bank agrees to accept an old
(L05) (Long-Term Debt Disclosure) At December 31, 2017, Redmond Company has outstanding three long-term debt issues. The first is a $2,000,000 note payable which matures June 30, 2020. The second is a $6,000,000 bond issue which matures September 30, 2021. The third is a $12,500,000 sinking fund
(L04) (Fair Value Option) Fallen Company commonly issues long-term notes payable to its various lenders. Fallen has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8% on an annual basis). Fallen has elected to use the fair value option for the
(L03) (Imputation of Interest with Right) On January 1, 2017, Margaret Avery Co. borrowed and received $400,000 from a major customer evidenced by a zero-interest-bearing note due in 3 years. As consideration for the zero-interest-bearing feature, Avery agrees to supply the customer’s inventory
(L03) (Imputation of Interest) Presented below are two independent situations.(a) On January 1, 2017, Robin Wright Inc. purchased land that had an assessed value of $350,000 at the time of purchase. A$550,000, zero-interest-bearing note due January 1, 2020, was given in exchange. There was no
(L03) (Entries for Zero-Interest-Bearing Notes) On January 1, 2017, Ellen Carter Company makes the two following acquisitions.1. Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $337,012.2. Purchases equipment by issuing
(L01,2) (Entries for Redemption and Issuance of Bonds) Jason Day Company had bonds outstanding with a maturity value of $300,000. On April 30, 2017, when these bonds had an unamortized discount of $10,000, they were called in at 104. To pay for these bonds, Day had issued other bonds a month
(L01,2) (Entries for Redemption and Issuance of Bonds) On June 30, 2009, County Company issued 12% bonds with a par value of $800,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2017.Because of lower interest rates and a significant change in the
(L01,2) (Entries for Redemption and Issuance of Bonds) Matt Perry, Inc. had outstanding $6,000,000 of 11% bonds(interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9,000,000 of 10%, 15-year bonds (interest payable July 1 and January 1) at 98. A portion of the proceeds
(L01,2) (Entry for Redemption of Bond) On January 2, 2012, Banno Corporation issued $1,500,000 of 10% bonds at 97 due December 31, 2021. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years.
(L01) (Information Related to Various Bond Issues) Karen Austin Inc. has issued three types of debt on January 1, 2017, the start of the company’s fiscal year.(a) $10 million, 10-year, 15% unsecured bonds, interest payable quarterly. Bonds were priced to yield 12%.(b) $25 million par of 10-year,
(L01) (Entries for Bond Transactions) On January 1, 2017, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907.37, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2017, and mature January 1, 2022, with interest payable December 31 of each
(L01) GROUPWORK (Entries and Questions for Bond Transactions) On June 30, 2017, Mischa Auer Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%. Auer uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on
(L01) (Classification) The following items are found in the financial statements.(a) Discount on bonds payable.(b) Interest expense (credit balance).(c) Unamortized bond issue costs.(d) Gain on repurchase of debt.(e) Mortgage payable (payable in equal amounts over next 3 years).(f) Debenture bonds
(L01) (Classification of Liabilities) Presented below are various account balances of K.D. Lang Inc.(a) Unamortized premium on bonds payable, of which $3,000 will be amortized during the next year.(b) Bank loans payable of a winery, due March 10, 2021. (The product requires aging for 5 years before
(L04) (Ratio Computations and Effect of Transactions) Presented below is information related to Carver Inc.Instructions (a) Compute the following ratios or relationships of Carver Inc. Assume that the ending account balances are representative unless the information provided indicates
(L04) (Ratio Computations and Analysis) Prior Company’s condensed financial statements provide the following information.Instructions (a) Determine the following for 2017.(1) Current ratio at December 31.(2) Acid-test ratio at December 31.(3) Accounts receivable turnover.(4) Inventory
(L04) (Ratio Computations and Discussion) Sprague Company has been operating for several years, and on December 31, 2017, presented the following balance sheet.The net income for 2017 was $25,000. Assume that total assets are the same in 2016 and 2017.Instructions Compute each of the following
(L04) (Financial Statement Impact of Liability Transactions) Presented below is a list of possible transactions.1. Purchased inventory for $80,000 on account (assume perpetual system is used).2. Issued an $80,000 note payable in payment on account (see item 1 above).3. Recorded accrued interest on
(L03) GROUPWORK (Premiums) The following are three independent situations.1. Hairston Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Hairston’s past experience indicates that only 80% of the stamps sold to licensees
(L03) (Asset Retirement Obligation) Oil Products Company purchases an oil tanker depot on January 1, 2017, at a cost of $600,000. Oil Products expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is
(L03) (Contingencies) Presented below are three independent situations. Answer the question at the end of each situation.1. During 2017, Salt-n-Pepa Inc. became involved in a tax dispute with the IRS. Salt-n-Pepa’s attorneys have indicated that they believe it is probable that Salt-n-Pepa will
(L03) (Premium Entries) No Doubt Company includes 1 coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2017, No Doubt Company purchased 8,800 premiums at 80 cents each and sold 110,000 boxes of soap powder at $3.30 per box; 44,000
(L03) (Warranties) Early in 2017, Sheryl Crow Equipment Company sold 500 Rollomatics during 2017 at $6,000 each. During 2017, Crow spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.Instructions(a) Prepare 2017
(L02) (Refinancing of Short-Term Debt) On December 31, 2017, Kate Holmes Company has $7,000,000 of short-term debt in the form of notes payable to Gotham State Bank due in 2018. On January 28, 2018, Holmes enters into a refinancing agreement with Gotham that will permit it to borrow up to 60% of
(L02) (Refinancing of Short-Term Debt) On December 31, 2017, Hattie McDaniel Company had $1,200,000 of shortterm debt in the form of notes payable due February 2, 2018. On January 21, 2018, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after
(L01) (Payroll Tax Entries) The payroll of YellowCard Company for September 2016 is as follows.Total payroll was $480,000, of which $110,000 is exempt from Social Security tax because it represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of
(L01) (Adjusting Entry for Sales Tax) During the month of June, Rowling Boutique recorded cash sales of $233,200 and credit sales of $153,700, both of which include the 6% sales tax that must be remitted to the state by July 15.Instructions Prepare the adjusting entry that should be recorded to
(L01) EXCEL (Compensated Absences) Assume the facts in E13-3 except that Matt Broderick Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting.The company used the following projected rates to accrue
(L01) (Compensated Absences) Matt Broderick Company began operations on January 2, 2016. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 paid sick days annually. Vacation days may be taken after January 15 of the year following the
(L01) EXCEL (Accounts and Notes Payable) The following are selected 2017 transactions of Sean Astin Corporation.Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system.Oct. 1 Issued a $50,000, 12-month, 8% note to
(L01) (Balance Sheet Classification of Various Liabilities) How would each of the following items be reported on the balance sheet?(a) Accrued vacation pay. (j) Premium offers outstanding.(b) Estimated taxes payable. (k) Discount on notes payable.(c) Service warranties on appliance sales. (l)
(L05) (Accounting for R&D Costs) More Company incurred the following costs during the current year in connection with its research and development activities.Cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years(uses straight-line depreciation)
(L02,5) (Accounting for R&D Costs) Price Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2016, the company expends $325,000 on a research project, but by the end of 2016 it is impossible to determine whether any benefit will be derived
(L05) (Accounting for Organization Costs) Angelou Corporation was organized in 2016 and began operations at the beginning of 2017. The company is involved in interior design consulting services. The following costs were incurred prior to the start of operations.Attorney fees in connection with
(L03,4) (Goodwill Impairment) Presented below is net asset information related to the Carlos Division of Santana, Inc.CARLOS DIVISION NET ASSETS AS OF DECEMBER 31, 2017 (IN MILLIONS)Cash $ 50 Accounts receivable 200 Property, plant, and equipment (net) 2,600 Goodwill 200 Less: Notes payable
(L04) (Copyright Impairment) Presented below is information related to copyrights owned by Mare Company at December 31, 2017.Cost $8,600,000 Carrying amount 4,300,000 Expected future net cash fl ows 4,000,000 Fair value 3,200,000 Assume that Mare Company will continue to use this copyright in the
(L01,2,3) (Accounting for Goodwill) On July 1, 2017, Brigham Corporation purchased Young Company by paying$250,000 cash and issuing a $100,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows.Cash $ 50,000 Accounts payable $200,000 Accounts receivable
(L03) (Accounting for Goodwill) Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Galleries.The following balance sheet of Zweifel is given in an abbreviated form as follows.ZWEIFEL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 Assets Liabilities and Stockholders’
(L01,2,4) (Accounting for Patents) Tones Industries has the following patents on its December 31, 2016, balance sheet.Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $30,600 3/1/13 17 years Patent B $15,000 7/1/14 10 years Patent C $14,400 9/1/15 4 years The following
(L01,2,5) (Accounting for Patents) During 2013, Winston Corporation spent $170,000 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2013, and had a legal life of 20 years and a useful life of 10 years. Legal
(L01,2,5) (Accounting for Patents, Franchises, and R&D) Carter Company has provided information on intangible assets as follows.A patent was purchased from Ford Company for $2,000,000 on January 1, 2016. Carter estimated the remaining useful life of the patent to be 10 years. The patent was carried
(L01,2,5) (Intangible Amortization) The following is selected information for Alatorre Company.1. Alatorre purchased a patent from Vania Co. for $1,000,000 on January 1, 2015. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2025. During 2017, Alatorre
(L01,2) EXCEL (Classification Issues—Intangible Assets) Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current year.Organization costs $24,000 Trademarks 15,000 Discount on bonds payable 35,000 Deposits with advertising agency for ads to promote goodwill
(L01,2) (Classification Issues—Intangibles) Presented below is selected information related to Martin Burke Inc. at year-end. All these accounts have debit balances.Cable television franchises Film contract rights Music copyrights Customer lists Research and development costs Prepaid expenses
(L01,2) (Classification Issues—Intangibles) The following is a list of items that could be included in the intangible assets section of the balance sheet.1. Investment in a subsidiary company.2. Timberland.3. Cost of engineering activity required to advance the design of a product to the
(L06) (Book vs. Tax (MACRS) Depreciation) Shimei Inc. purchased computer equipment on March 1, 2017, for$31,000. The computer equipment has a useful life of 10 years and a salvage value of $1,000. For tax purposes, the MACRS class life is 5 years.Instructions(a) Assuming that the company uses the
(L04) (Depletion Computations—Minerals) At the beginning of 2017, Aristotle Company acquired a mine for$970,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately
(L04) (Depletion Computations—Mining) Alcide Mining Company purchased land on February 1, 2017, at a cost of$1,190,000. It estimated that a total of 60,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the
(L04) (Depletion Computations—Timber) Forda Lumber Company owns a 7,000-acre tract of timber purchased in 2003 at a cost of $1,300 per acre. At the time of purchase, the land was estimated to have a value of $300 per acre without the timber. Forda Lumber Company has not logged this tract since it
(L04) (Depletion Computations—Timber) Stanislaw Timber Company owns 9,000 acres of timberland purchased in 2006 at a cost of $1,400 per acre. At the time of purchase, the land without the timber was valued at $400 per acre. In 2007, Stanislaw built fire lanes and roads, with a life of 30 years,
(L03) (Impairment) The management of Petro Garcia Inc. was discussing whether certain equipment should be written off as a charge to current operations because of obsolescence. This equipment has a cost of $900,000 with depreciation to date of $400,000 as of December 31, 2017. On December 31, 2017,
(L03) (Impairment) Assume the same information as E11-16, except that Suarez intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $20,000.Instructions(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31,
(L03) (Impairment) Presented below is information related to equipment owned by Suarez Company at December 31, 2017.Cost $9,000,000 Accumulated depreciation to date 1,000,000 Expected future net cash fl ows 7,000,000 Fair value 4,800,000 Assume that Suarez will continue to use this asset in the
(L01,2) (Depreciation for Fractional Periods) On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time, and
(L01) (Error Analysis and Depreciation, SL and SYD) Mike Devereaux Company shows the following entries in its Equipment account for 2018. All amounts are based on historical cost.Instructions (a) Prepare any correcting entries necessary.(b) Assuming that depreciation is to be charged for a full
(L01,2) (Depreciation—Replacement, Change in Estimate) Greg Maddox Company constructed a building at a cost of $2,200,000 and occupied it beginning in January 1998. It was estimated at that time that its life would be 40 years, with no salvage value.In January 2018, a new roof was installed at a
(L01,2) (Depreciation Computation—Addition, Change in Estimate) In 1990, Herman Moore Company completed the construction of a building at a cost of $2,000,000 and first occupied it in January 1991. It was estimated that the building will have a useful life of 40 years and a salvage value of
(L01,2) (Depreciation—Change in Estimate) Machinery purchased for $60,000 by Tom Brady Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the
(L01) (Depreciation Computations, SYD) Five Satins Company purchased a piece of equipment at the beginning of 2014. The equipment cost $430,000. It has an estimated service life of 8 years and an expected salvage value of $70,000. The sumof-the-years’-digits method of depreciation is being used.
(L02) (Composite Depreciation) Presented below is information related to LeBron James Manufacturing Corporation.Instructions (a) Compute the rate of depreciation per year to be applied to the plant assets under the composite method.(b) Prepare the adjusting entry necessary at the end of the year to
(L01,2) (Depreciation Computation—Replacement, Nonmonetary Exchange) George Zidek Corporation bought a machine on June 1, 2015, for $31,000, f.o.b. the place of manufacture. Freight to the point where it was set up was $200, and $500 was expended to install it. The machine’s useful life was
(L01,2) (Different Methods of Depreciation) Jackel Industries presents you with the following information.Instructions Complete the table for the year ended December 31, 2019. The company depreciates all assets using the half-year convention. Description Machine A Date Purchased Salvage Life in
(L01,2) (Depreciation Computations—Five Methods, Partial Periods) Muggsy Bogues Company purchased equipment for $212,000 on October 1, 2017. It is estimated that the equipment will have a useful life of 8 years and a salvage value of$12,000. Estimated production is 40,000 units and estimated
(L01,2) (Depreciation Computations—Four Methods) Robert Parish Corporation purchased a new machine for its assembly process on August 1, 2017. The cost of this machine was $117,900. The company estimated that the machine would have a salvage value of $12,900 at the end of its service life. Its
(L01,2) EXCEL (Depreciation Computations—Five Methods) Jon Seceda Furnace Corp. purchased machinery for$315,000 on May 1, 2017. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2018, Seceda
(L01,2) (Depreciation Computations—SYD, DDB—Partial Periods) Judds Company purchased a new plant asset on April 1, 2017, at a cost of $711,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Judds’accounting period is the calendar year.Instructions(a)
(L01) (Depreciation—Conceptual Understanding) Rembrandt Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one
(L01) EXCEL (Depreciation Computations—SL, SYD, DDB) Deluxe Ezra Company purchases equipment on January 1, Year 1, at a cost of $469,000. The asset is expected to have a service life of 12 years and a salvage value of $40,000.Instructions(a) Compute the amount of depreciation for each of Years 1
(L06) (Disposition of Assets) On April 1, 2017, Gloria Estefan Company received a condemnation award of $430,000 cash as compensation for the forced sale of the company’s land and building, which stood in the path of a new state highway.The land and building cost $60,000 and $280,000,
(L06) (Entries for Disposition of Assets) On December 31, 2017, Travis Tritt Inc. has a machine with a book value of$940,000. The original cost and related accumulated depreciation at this date are as follows.Machine $1,300,000 Less: Accumulated depreciation 360,000 Book value $ 940,000
(L05) (Analysis of Subsequent Expenditures) Plant assets often require expenditures subsequent to acquisition. It is important that they be accounted for properly. Any errors will affect both the balance sheets and income statements for a number of years.Instructions For each of the following
(L05,6) (Analysis of Subsequent Expenditures) The following transactions occurred during 2017. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all
(L05) GROUPWORK (Analysis of Subsequent Expenditures) King Donovan Resources Group has been in its plant facility for 15 years. Although the plant is quite functional, numerous repair costs are incurred to maintain it in sound working order. The company’s plant asset book value is currently
(L04) (Nonmonetary Exchange) Dana Ashbrook Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $8,000 plus trade-in, f.o.b. factory. Dana Ashbrook Inc. paid $8,000 cash and traded in used equipment. The used equipment had originally cost $62,000; it had a book value
(L04) (Nonmonetary Exchange) Carlos Arruza Company exchanged equipment used in its manufacturing operations plus $3,000 in cash for similar equipment used in the operations of Tony LoBianco Company. The following information pertains to the exchange.Carlos Arruza Co. Tony LoBianco Co.Equipment
(L04) (Nonmonetary Exchange) Cannondale Company purchased an electric wax melter on April 30, 2017, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase.List price of new melter $15,800 Cash paid 10,000 Cost of old melter (5-year life, $700
(L04) (Nonmonetary Exchange) Busytown Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who
(L03,4) GROUPWORK (Asset Acquisition) Hayes Industries purchased the following assets and constructed a building as well. All this was done during the current year.Assets 1 and 2: These assets were purchased as a lump sum for $100,000 cash. The following information was gathered.Description Initial
(L04) (Purchase of Computer with Zero-Interest-Bearing Debt) Cardinals Corporation purchased a computer on December 31, 2016, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each December 31 beginning in 2017. An assumed interest rate
(L04) (Purchase of Equipment with Zero-Interest-Bearing Debt) Chippewas Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2017, to expand its production capacity to meet customers’ demand for its product. Chippewas issues an $800,000, 5-year,
(L01,4) (Entries for Acquisition of Assets) Presented below is information related to Zonker Company.1. On July 6, Zonker Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:Land $ 400,000 Buildings 1,200,000 Equipment
(L01,2,4) (Entries for Asset Acquisition, Including Self-Construction) Below are transactions related to Duffner Company.(a) The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $81,000.(b) 13,000 shares of common stock with a
(L01,4) (Entries for Equipment Acquisitions) Jane Geddes Engineering Corporation purchased conveyor equipment with a list price of $10,000. Presented below are three independent cases related to the equipment. (Round to the nearest dollar.)(a) Geddes paid cash for the equipment 8 days after the
(L03) (Capitalization of Interest) The following three situations involve the capitalization of interest.Situation I: On January 1, 2017, Oksana Baiul, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,000,000. It was estimated that it
(L03) (Capitalization of Interest) On July 31, 2017, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2017. To help finance construction, on July 31 Amsterdam issued a
(L03) (Capitalization of Interest) On December 31, 2016, Main Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building:March 1, $360,000; June 1, $600,000; July 1, $1,500,000;
(L03) (Capitalization of Interest) Harrisburg Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2017. Harrisburg expected to complete the building by December 31, 2017. Harrisburg has the following
(L02,4) (Correction of Improper Cost Entries) Plant acquisitions for selected companies are as follows.1. Belanna Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $700,000. At the time of purchase, Torres’s assets had the
(L01,3) (Treatment of Various Costs) Ben Sisko Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.Abstract company’s fee for title search $ 520 Architect’s fees 3,170 Cash paid for land and dilapidated
(L01,2) (Purchase and Self-Constructed Cost of Assets) Worf Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2017.Purchase Cash paid for equipment, including
(L01) EXCEL (Acquisition Costs of Trucks) Kelly Clarkson Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2017. The terms of acquisition for each truck are described below.1. Truck #1 has a list price of
(L01) EXCEL (Acquisition Costs of Realty) Martin Buber Co. purchased land as a factory site for $400,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months.The company paid $42,000 to raze the old buildings and sold salvaged lumber and brick
(L01) (Acquisition Costs of Realty) The following expenditures and receipts are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses.(a) Money borrowed to pay building contractor (signed a note) $(275,000)(b) Payment
(L07) (Change to LIFO Retail) John Olerud Ltd., a local retailing concern in the Bronx, New York, has decided to change from the conventional retail inventory method to the LIFO retail method starting on January 1, 2018. The company recomputed its ending inventory for 2017 in accordance with the
(L07) (Dollar-Value LIFO Retail) Connie Chung Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2016. At that time the inventory had a cost of $54,000 and a retail price of $100,000. The following information is available.Year-End Current Year Year-End Inventory at
*E 9-28 (L07) (Conventional Retail and Dollar-Value LIFO Retail) Amiras Corporation began operations on January 1, 2017, with a beginning inventory of $30,100 at cost and $50,000 at retail. The following information relates to 2017.Retail Net purchases ($108,500 at cost) $150,000 Net markups 10,000
*E 9-26 (L07) (Dollar-Value LIFO Retail) You assemble the following information for Seneca Department Store, which computes its inventory under the dollar-value LIFO method.Instructions Compute the cost of the inventory on December 31, 2017, assuming that the inventory at retail is (a) $294,300 and

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