As a result of the transaction, what is the effect on the profit or loss? what is the cost of the new asset acquired? with computations
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As a result of the transaction, what is the effect on the profit or loss?
what is the cost of the new asset acquired?
with computations
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- Elis-elis Corp., a manufacturer of ID cards, was considering the replacement of one of its machine. The machine has a book value of P500,000 and still had a five remaining years of useful life.. The company had been using straight line method for the depreciation of machines. The scrap value of this machine was P50,000 and this can be sold now for P350,000. If management opted to continue using this machine, a repair cost of P80,000 will be incurred.. The replacement machine is a computerized-controlled and more energy-efficient. It has a price tag of P950,000 with an economic life of 5 years and a market value of P150,000 after the life of the asset. The machine which is a product of rapid technological changes required further testing and setting up, that would cost P50,000 (not to be capitalized) but would decrease working capital by P75,000. The accountant wants to depreciate this asset using a 5-year MACRS (1st year, 20%; 2nd year, 27%; 3rd year, 19%; 4th year, 12%;; 5th year,…A company purchased computers for $200,000. The installation charge of the computer was $10,000. Initially, the declared salvage value was $40,000. However, the company decided to sell the computer in the middle of 3rd year because of changing production plan. Fortunately, another company agreed to buy that computer for $50,000. Determine the gain or loss, if MACRS depreciation is used. Dont use excelElite Co. has office furniture that cost $75,000 and that has been depreciated $48,000. Record the disposal under the following assumptions: * It was exchanged for similar office furniture. The old furniture has a fair market value of $46000, and $8000 was paid. *It was exchanged for similar office furniture. The old office has a fair market value of $25000 and $29000 was paid.
- Dump It is selling a machine that no longer is large enough for the production requirements. Dump It has had the machine for 3 years and has depreciated it using the straight-line method. Original cost had been $98,000, and salvage was estimated at $6,000. The machine had been expected to last for 8 years. (in all answers round to nearest dollar; do not use "$" or commas in your answer) Journalize the sale of the machine for $50,000.Sassy's Sweets Shoppe purchased equipment on January 1. The cost was $15,000, and the equipment had a residual value of $5,000. The equipment was given a useful life of 10 years. After the end of two years, it was determined that the equipment would be obsolete in 5 more years and the residual value would still be $5,000. What will be the depreciation under the straight – line method to the nearest dollar be for the third year? O A. $1,600 O B. $1,500 O C. $8,000 O D. $1,000During the current year, Polly Company purchased a second hand machine at a price of P5,000,000. A cash payment of P1,000,000 was made and a two-year, non-interest bearing note was issued for the balance of P4,000,000. Recent transactions involving similar machine indicate that the used machine has a second hand market value of P3,800,000. A new machine would cost P6,500,000. The following costs were incurred during the year: Cost of removing old machine that is replaced Cash proceeds from the sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdowns Cost of installation Cost of testing machine prior to use Cost of hauling the machine from vendor to company premises Cost of repairing damage to machine caused when the machine was dropped during installation Repairs incurred during the first year of operation Safety device added to the machine Cost of training workers to operate the machine What amount should…
- The La Salle Bus Company has decided to purchase a new bus for $85,000 with a trade-in of their old bus. The old bus has a BV of $10,000 at the time of the trade in. The new bus will be kept for 10 years before being sold. Its estimated SV at that time is expected to be $5,000. Find out all different parameters of SL depreciations.A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Its estimated SV at the time is expected to be $5,000. Use this information to solve, Using the SL method, the BV at the end of the depreciable life is (a) $11,811 (b) $10,000 (c) $5,000 (d) $0.During the current year, Benguet Company purchased a secondhand machine at a price of P300,000. A cash down payment of P50,000 was made and a two-year, non interest bearing note was issued for the balance. Recent transactions involving similar machinery indicate that the used machine has a secondhand market value of P240,000. A new machine would cost P400,000. The following costs were incurred on the machine during the year: Cost of removing the old machine 2,000Cash proceeds form the sale of the old machine 1,200Cost of spare parts purchased and set aside from breakdowns during the first two years of normal use of the machine 20,000Cost of labor to install the machine 4,000Cost of testing the machine prior to use 1,800Cost of hauling the machine from the vendor’s place of business to the company’s premises 5,000Cost of repairing the damage to the machine when it was dropped during the installation 3,000Repairs incurred during the first year of operations 6,000Safety devices added to…
- A truck costs $50,000 when new and has accumulated depreciation of $35,000. Suppose Wilson Towing exchanges the truck for a new truck. The new truck has a market value of $60,000, and Wilson pays cash of $40,000. Assume the exchange has commercial substance. What is the result of this exchange? a. No gain or loss b. Gain of $5,000 c. Loss of $5,000 d. Gain of $45,000Al Aznar Company is manufacturer of furniture. At the end of 2018, they have inventory worth $ 14500 and out of that $ 4500 worth inventory is damaged. The company decided to repair the inventory and sell it for 3500. The repair cost is $ 500.1. When do a company write down its inventory value (cost) to the Net Realizable Value?2. Imagine that the company decided to sell the damaged inventory for $ 3200 without spending any amount for repairing, how much amount need to write off from the value of inventory at the end of the period?Stahmann Products paid $350,000 for a numerical controller during the last month of 2007 and had it installed at a cost of $50,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Stahmann sold the system at the end of 2011 for $45,000. Determine the Book Value at the end of 2011 by using a. Straight Line method b. Declining Balance Depriciation(DDB) c. Why or why not can you use Sum of Years Digit method? Show your complete solution.
