While preparing the year-end adjusting entries for 2021, ACME Incorporated's controller discovered that repairs to the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
While preparing the year-end adjusting entries for 2021, ACME Incorporated's controller discovered that repairs to the building made in early January 2018 in the amount of $900,000 were capitalized. These repairs did not meet the criteria for capitalization and should have been expensed when incurred. buildings are depreciated on a declining balance basis at 10% and ACME's effective tax rate is 30% for all years. Income tax was correctly calculated for 2018 and the repairs were not included as part of the CCA calculations or the UCC pool. The January 01, 2021 retained earnings balance was $2,800,000, net income for 2021 was $900,000 and $400,000 dividends were declared. Net income for 2021 includes the correct depreciation for 2021. Required: 1. Prepare the required journal entry to recognized the accounting issue above assuming that ACME reports under ASPE. (6 marks) 2. Prepare ACME's statement of retained earnings at December 31, 2021. (7 marks) 4 While preparing the year-end adjusting entries for 2021, ACME Incorporated's controller discovered that repairs to the building made in early January 2018 in the amount of $900,000 were capitalized. These repairs did not meet the criteria for capitalization and should have been expensed when incurred. buildings are depreciated on a declining balance basis at 10% and ACME's effective tax rate is 30% for all years. Income tax was correctly calculated for 2018 and the repairs were not included as part of the CCA calculations or the UCC pool. The January 01, 2021 retained earnings balance was $2,800,000, net income for 2021 was $900,000 and $400,000 dividends were declared. Net income for 2021 includes the correct depreciation for 2021. Required: 1. Prepare the required journal entry to recognized the accounting issue above assuming that ACME reports under ASPE. (6 marks) 2. Prepare ACME's statement of retained earnings at December 31, 2021. (7 marks) 4
Expert Answer:
Answer rating: 100% (QA)
Solution Date 2021 2021 Solution Part1 Journal entries for 202 Particulars Accumulated ... View the full answer
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these accounting questions
-
The company tax rate is 30 percent. The firm has no debt in its capital structure. It is valued at $100 million. Assuming MM (1963) world, what would be the value of the firm if it issued $40 million...
-
For all questions assume the relevant tax rate is 30 percent and all annuities begin at the end of year 1. 1. (a) The $30,000 of excess liquidity is earning 5 percent compounded monthly in a money...
-
One measure of the effective tax rate is the difference between the IRRs of pretax and after tax cash flows, divided by the pretax IRR. Consider, for example, an investment I generating a perpetual...
-
Find the laurents series f(z)= 1/(z-1)(z-2) (i) |z| <1 (ii) 1 2
-
What ingredients would you need to conduct a traditional equity method valuation for Foursquare? If you had the necessary projections, do you think that they would also suggest the $80$100 million...
-
1. What would you do if you were Stefan? What if you were Dillon? 2. What advice would you offer to Stefan and Dillon to maintain strong family relationships?
-
6. Craig Hare offered computers and related equipment for sale on various Internet auction Web sites. He accepted payment but not responsibility-he never shipped the goods. Both the FTC and the U.S....
-
The following is an excerpt from a note to the nancial statements of the city of Dallas (dates changed): The city prepares its annual appropriated general fund, debt service fund, and proprietary...
-
To use an automated teller machine at a certain bank, you must enter a 3-digit code, using the digits 0-9. How many 3-digit codes are possible if repetition of digits is permitted? There are possible...
-
Phoebe Company ended its fiscal year on July 31, 2020. The companys adjusted trial balance as of the end of its fiscal year is as follows. Instructions a. Prepare the closing entries using page J15....
-
Which distribution is associated with the 80-20 rule, where approximately 80% of the effects come from 20% of the causes? Which distribution is associated with the 80-20 rule, where approximately 80%...
-
How do advanced seismic hazard assessment methods, including probabilistic seismic hazard analysis (PSHA) and ground motion simulation techniques, contribute to the development of resilient...
-
Reflect on the overall assessment of the concept of the Global Economy and the implications of public policy, particularly regulatory policies? How does this affect businesses, political...
-
Help me figure out the STATA CODES HOW TO WRITE THESE STATA CODES? the data is collegetown in Poe5 3.22 The data file collegetown contains data on 500 single-family houses sold in Baton Rouge,...
-
Determine the number and nature of the roots of the following quadratic equations by solving for the discriminant. 1. y+5y-6-0 2.-2y-8-8y 3. 3y+7y+10=3 4. y(4y-5)=6y+1 5. -2y-9--9y-y
-
You log into a closed group on a social networking site and read a posting from a fellow nursing student. The posting describes in detail the complex care the student gave to a 9 y/o patient in a...
-
Proposals Presentations can make-or break-both careers and businesses. A good presentation can bring in millions of dollars in new sales or fresh investment capital. A bad presentation might cause...
-
Which of the following gives the range of y = 4 - 2 -x ? (A) (- , ) (B) (- , 4) (C) [- 4, ) (D) (- , 4] (E) All reals
-
At December 31, 2019, Shutdown Manufacturing Limited had outstanding a $300,000, 12% note payable to Thornton National Bank. Dated January 1, 2017, the note was issued at par and due on December 31,...
-
On January 1, 2020, Schmitt Inc.'s general ledger had these liability accounts: CPP contributions payable......................................$ 2,152 EI premiums...
-
Assume the same information as in BE17.7 except that on October 1, 2020, Laurin declared a 3- for-1 stock split instead of a 10% stock dividend. Calculate the weighted average number of shares...
-
Assume the same facts as in Brief Exercise 14-16, except that Sharp Company does not intend to trade the bonds or to hold them until maturity. a. Prepare the entry for the purchase of the debt...
-
Tracking Co. holds an AFS bond investment in Fields Corp. The carrying value of the investment is \(\$ 4,500\) at December 31, 2020. Tracking Co. determines the fair value of the investment at the...
-
The following information relates to an AFS security investment held by Gomez Inc. Provide the journal entry to adjust the investment to fair value on December 31, 2020. Fair value. Carrying value...
Study smarter with the SolutionInn App