Reference no: EM131296143
(Accounting Changes—Depreciation) Hearts Inc. acquired the following assets in January 2012.
Equipment, estimated service life, 5 years; no salvage value $650,000
Building, estimated service life, 40 years; salvage value, $500,000 $5,500,000
The equipment has been depreciated using the double-declining balance method for the first 2 years for financial reporting purposes. In 2014, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 40 years to 35 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method. Instructions
Instructions:
(a) Prepare the general journal entry to record depreciation expense for the equipment in 2014.
(b) Prepare the journal entry to record depreciation expense for the building in 2014.
|
Cash flow statement categories
: Cash flow statement categories. Classify the transactions into the best of these five categories. Exchange of furniture for office equipment. Purchase of treasury stock. Decrease in accounts payable during the year.
|
|
Contingent liability can be reasonably estimated
: When the amount of a contingent liability can be reasonably estimated and its likehood is possible but not probable, the company should:
|
|
Levels of sales is in the operating profit area
: For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the relevant range are $2,500,000. Construct a cost-volume-profit chart on a sheet of pa..
|
|
Differences in income for financial statement-tax purposes
: Davo Inc. began operations in January 2013. For certain of its property sales, Davo recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Davo recognizes income when it collects cash from the buye..
|
|
Journal entry to record depreciation expense for equipment
: Hearts Inc. acquired the following assets in January 2012. The equipment has been depreciated using the double-declining balance method for the first 2 years for financial reporting purposes. Prepare the general journal entry to record depreciation e..
|
|
Loss is disallowed due to her tax basis or at-risk amount
: Sue invested $5,000 in the ABC General Partnership and received a 10 percent interest in the partnership. The partnership had $40,000 of unsecured debt. Sue is allocated a 10 percent share of the debt resulting in a tax basis of $9,000 and at risk am..
|
|
Prepare a fifo-method processing-costing report
: Comfort chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 73,000 chairs. During the month, the firm completed 78,000 chairs, and transferred them to the Finishing Department. The FI..
|
|
Prepare production budget-direct-materials purchase budget
: Kason, Inc., expects to sell 18,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016: Prepare a production..
|
|
Compute the amount of the cost of goods sold
: The following information for 2016 is available for Marino Company: Compute the cost of the ending inventory before the physical inventory is taken. Ignore Sales allowances in your computations. Compute the amount of the cost of goods sold that came ..
|