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On January 1, 2015, Beacon issued $300,000 of bonds for $272,263. On this date, the market rate of interest was 16%.
Calculate the amount of interest expense shown in the income statement at December 31, 2018. Is this amount the same as cash paid by Tron in 2018?
Record all necessary entries for the period July 2, 2015 to July 2, 2016 inclusive, including December 31, 2015, the year-end of the company.
What is the balance of the Bond Discount account in the general ledger at December 31, 2015?
The bonds were authorized on April 1, 2015 but not issued until July 1, 2015. Interest is paid semi-annually on April 1 and October 1.
Comment on the interest rate that results in each period. Do you think that this should vary from period to period? Why or why not?
Paid the semi-annual interest on the issued bonds and made an entry to record straight-line amortization.
Assume where applicable that the company uses the ½ year rule to calculate depreciation expense in the year of acquisition and disposal.
Calculate and prepare journal entries to record depreciation expense for 2016 and 2017 using the double-declining balance method.
Murphy Limited purchased a $30,000 asset with a five-year life expectancy and no residual value.
Given the substantial difference between the depreciation amounts in 2016 and 2017, is the information conveyed to the reader of Sadler Corporation's 2017 .
Prepare the journal entries to record the sale of the truck on March 3, 2018 for $8,000 cash, including 2018 depreciation expense.
On December 31, 2017, the value of the patents was estimated to be $80,000. The machinery was sold on December 2, 2018 for $100,000.
Janz Corporation purchased a piece of machinery on January 1, 2015. The company's year-end is December 31.
If one of management's objectives is to maximize 2016 net income, what method should be adopted?
Calculate amount of machine on which depreciation will be calculated
Calculate the cost of the machine that remains to be depreciated at January 1, 2018 based on the new estimates.
On January 1, 2019, the company traded in the original equipment for new equipment. The company paid and additional $140,000 cash for the new equipment.
The computer software has an estimated useful life of three years and no residual value. It will be amortized using the double-declining balance method.
Calculate the total depreciation for the five-year period 2016-2020, under the straight-line and double-declining balance methods.
Calculate the depreciation expense and the carrying amount at year-end for the three-year period under each of these depreciation methods: straight-line.
On January 1, 2017 Fox Creek revised the estimated useful life of the machine from a total of three years to a total of five years.
Assume the company calculates depreciation expense based on kilometres driven. The estimated total usage was 800,000 kms.
The purchase price of machine 2 was $8,000 and Bruce Corp. received a trade-in allowance of $4,500.
Explain the accounting treatment you would suggest for each including amortization method, with reasons.