Cost-Salvage Value/Total units of production Essay

Salta go with inst eithers a manufacturing gondola in its milling machinery at the beginning of the social class at a follow of $87,000. The machines useful life is estimated to be 5 years, or 400,000 units of harvest-feast, with a $7,000 salvage valuate. During its randomness year, the machine produces 84,500 units of product. Determine the machines second year disparagement under the units of return method serve up $16,900 salute-Salvage Value/Total units of production(87,000 7,000)/400,000 = .2.2 * 84,500 = 16,900Amortization process Is the systematic allocation of the damage of an intangible summation to depreciate over its estimated useful life. Big River Rafting pays $310,000 plus $15,000 in occlusion greets to buy out a competitor. The real estate consists of cut down appraised at $105,000, a expression appraised at $210,000 and equipment appraised at $35,000. reason the cost that should be allocated to the land. dish $97,500105,000 + 210,000 + 35,000 = 350 ,000105,000/350,000 = .3.3 * 325,000 = 97,500Leasehold act be the rights given to the lessee by the lessor of a lease. Copyright practice Gives its owner the exclusive right to publish and distribute a musical or literary work during the life of the fountain plus 70 years. A patent get along Gives its owner exclusive right to manufacture and sell a patented item or to use a process for 20 years. Carmel Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to regain the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. Compute the depletion expense for the first year assuming 418,000 tons were mined. come $1,358,5005,900,000 + 600,000 = 6, 500,000Cost Salvage Value/ Total Units of Capacity6,500,000-0/2000000 = 3.253.25 * 418,000 = 1,358,500Cambria Company reports net gross revenue of $4,315 million cost of goods sold of $2,808 million net income of 283 million and average out ingrai ned summations of $2,136. Compute its total asset turnover. Answer 2.02Net sales/Average Total Asset4,315/2,136 = 2.02Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machines useful life is estimated to be 5 years, or 400,000 units of product, with $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines second year depreciation under the straight-line method. Answer $16,000Cost salvage value/useful life in periods87,000 7,000/5 =16,000A depreciation asset costing $75,000 is purchased on September 1, year 1. The asset is estimated to have a salvage value of $10,000 and an estimated useful life of 4 years. Double-declining- equilibrize depreciation is used. If the asset is sold on December 31, Year 3 for $13,000, the journal admittance to go in the sale depart include Answer A cast to loss on sale for $2,625.Chapter 11 QuizzesThe stream FUTA tax co me in is 0.8% and SUTA tax rate is 5.4%. Both taxes atomic number 18 applied to the first $7,000 of an employees pay. Assume that an employee realize $8,900. What is the f ar of total unemployment taxes the employer must pay on the employees wages? Answer 434.007,000*5.4% = 3787000*0.8% = 56378 + 56 = 434FICA taxes includeAnswer Social Security taxesLiabilityAnswer Must sometimes be estimatedIf the times absorb proportionAnswer Increase then the in guarantor decreases.Gross pay is?Answer Total compensation acquire by an employee before any deductions. A come withs income before concern expense and taxes is $250,000 and its beguile expense is $100,000. Its times interest earned ratio is Answer 2.50Income before hobby expense and income taxes/Interest expenditure 250,000/100,000 = 2.50Employee pass benefitsAnswer are estimated liabilitiesThe amount of national income taxes withheld from an employees payroll check is determined by Answer the amount of the employees recei ved clams for the pay period and number of withholding allowances the employee claims. Amount received in advanced from customers for future products or services Answer are liabilitiesA follow estimates that a guaranty expense testament be 4% of sales. The companys sales for the current period are $185,000. The current periods entry to record warranty expense is Answer Debit warranty expense $7,400 accredit estimated warranty indebtedness $7,400 185,000*4% = 7,400An employee earned 62,500 during the year working for an employer. The FICA tax rate for social security is 6.2% and FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.8% and SUTA is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employees pay. What is the total unemployment taxes does the employee have to pay? Answer $0.00 Employees do not pay unemployment taxes.FUTA taxes areAnswer unemployment taxes firmament Companys salaried employees earned two weeks spend per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Arena Companys weekly journal entry to record the vacation expense Answer Debit vacation benefits expense $17,160 realization vacation benefits payable $17,160 858,000/50 = 17,160A company sells computers at a interchange price of $1,800 individually. Each computer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all computers sold will be under the warranty at an average cost of $150 each. During November the company sold 30,000 computers and 400 computers were serviced under the warranty at total cost of 55,000. The brace is the estimated warranty liability account at November 1 was $29,000. What is the companys warranty expense for the month of November? Answer 90,000(30,000*2%*150) = 90,000A company had fixed interest expense of $6,000, its income before interest expense and any income taxes is $18,000, and its net income is $8,400. The companys measure interest earned ratio equals Answer 3.0Advanced ticket sales totaling $6,000,000 cash in would be recognized as follows Answer Debit Cash Credit honorary Revenue During August, Arena Company sells $356,000 in product that has a iodin year warranty. Experience shows that warranty expenses average about 5% of the change price. The warranty liability account has a eternal sleep of $12,800 before adjustment. Customers returned product for warranty repairs during the month that used $9,400 in parts and repairs. The entry to record customer warranty repairs is Answer Debit Estimated Warranty Liability $9,400 credit Parts Inventory $9,400 Obligations not expected to be paid within the longer of one year or the companys in operation(p) cycle is reported as Answer Long-term liabilityTimes Interest earned computation isAnswer (Net Income + Interest expense + Income taxes)/Interest expense The difference between the amount received from issuing a note payable and the amount re paid is referred to as Answer InterestA contingent LiabilityAnswer is a potential obligation that depends on a future event arising from a past transaction or event. In the accounting records of a defendant, lawsuitsAnswer should be recorded if fee for damages is probable and the amount can be reasonably estimated. A companys fixed interest expense is $8,000 its income before interest expense and income taxes is $32,000. Its net income is $9,600. The companys times interest earned ratio equals Answer 4.0An Estimated LiabilityAnswer Is a know obligation of an uncertain amount that can be reasonably estimated. written text employee payroll deduction may involveAnswer Liabilities to individual employees, Liabilities to federal and state governments, Liabilities to insurance companies, and Liabilities to labor unions. Chapter 12 QuizzesKevin and Jeannie formed This & That as a limited liability company. Unless the member owners elect to be treated otherwise, the IRS will tax the LLC a s Answer a leagueA federation that has two classes of allys, general and limited, where the limited partners have no personal liability beyond the amounts they expend in that confederation, and no active role in the partnership, except as specified in the partnership musical arrangement is a Answer Limited confederacyGroh and capital of Mississippi are partners. Grohs bang-up balance in the partnership is $64,000, and capital of Mississippis capital balance is $61,000. Groh and knaveson have acceptd to share evenly in income and loss. Groh and Jackson agree to accept Block with a 20%interest. Block will invest $35,000 in the partnership. The bonus that is granted to Groh and Jackson equals Answer $1,5001.64,000 + 61,000=125,0002. 125,000 + 35,000=160,0003. 160,000*20%= 32,0004.35,000 32,000 = 3,0005. 3,000*1/2= 1,500bait and play tricks are forming a partnership. Badger invests a building that has a market value of $350,000 the partnership assumes debt instrument for a $125,000 note secured by a mortgage on the property. Fox invest $100,000 in cash and equipment that has a market value of $75,000. For the partnership the amount recorded for Badgers capital and Foxs capital are Answer Badger $225,000 and Fox $175,000Badger 35,000-125,000 = 225,000 Fox 100,000 + 75,000 = 175,000Regina Harrison is a partner in Pressed for Time. An analysis of Reginas capital account indicates that during the intimately recent year, she withdrew $20,000 from the partnership. Her share of the partnerships net loss was $16,000 and she make an additional equity contribution for $10,000. Her capital account ended the year at $150,000, what was her capital balance at the beginning of the year? Answer $176,00010,000 16,000 20,000 = -26,000150,000 (-26,000) = 176,000Collins and Farina are forming a partnership Collins is drop in a building that as market value of $80,000. However the building carries a $56,000 mortgage that will be assumed by the partnership. Farina is investing $20,000 cash. The balance of Collins capital Account will be Answer $24,00080,000 56,000 = 24,000A partnership in which all partners have mutual path and unlimited liability is called Answer General Partnership In the absence of a partnership agreement, the law says that income (and loss) should be allocated based on Answer Equal shares Groh and Jackson are partners. Grohs capital balance is $64,000 and Jacksons capital balance is $61,000. They have agreed to share as in income or loss. Groh and Jackson agree to accept Block with a 25% interest. Block will invest $35,000 in the partnership. The bonus that is granted to Block equals Answer 5,00064,000 + 61,000 = 125,000 125,000 +35,000 = 160,000 160,000*25% = 40,000 40,000 35,000= 5,000 Nee high gear and Low Jack are partners. They share income and loss equally. Highs beginning partnership capital balance for the current year is $285,000 and Jacks is $370,000. The partnership had net income of $250,000 for the year. High withdrew $90,000 and Jack withdrew $100,000. What is Jacks return on equity? Answer 41.3%A partnership agreementAnswer is binding even if it is not in writing.A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is Answer Limited Liability PartnershipPartners withdrawals of assets areAnswer Debited to their withdrawals account Sam, Bart, and Alex are fade out their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current periods capital account balances are Sam, $45,000 Bart, $37,000 and Alex, $(5,000). subsequently all assets are sold and liabilities are paid, there is $77,000 in cash to be distributed. Alex is unable to pay the deficiency.The journal entry to record the statistical distribution should be Answer Debit Sam, Capital $42,500 Debit Bart, Capital $37,000 Credit Cash $77,000 metalworker, westmost, and Krug form a partnership. Smith contrib utes $180,000, West contributes $150,000 and Krug contributes $270,000. Their partnership agreement calls for the income or loss division to be based on the ratio of capital invested. If the partnership reports income of $175,000 for its first year, what amount of income is credited to Smiths capital account? Answer $52,500Smith 180,000/600,000 = .3.3 * 175,500 = 52,500Smith, West and Krug form a partnership. Smith contributes $180,000, West contributes $150,000, and Krug contributes $270,000. Their partnership agreement calls for the income and loss division to be based on the ratio of capital invested. If the partnership reports income of $175,000 for itsfirst year, what amount of income is credited to Krugs capital account? Answer $78,750Krug 270,000/600,000 = .45.45 * 175,000 = 78,750Smith, West, and Krug form a partnership. Smith contributes $180,000, West contributes $150,000, and Krug contributes $270,000. Their partnership agreement calls for a 5% invest allowance on the par tners capital balances with the be income or loss to be allocated equally. If the partnership reports income of $174,000 for its first year, what amount of income is credited to Wests capital account? Answer $55,500Smith, West, and Krug form a partnership. Smith contributes $180,000, West contributes $150,000and Krug contributes $270,000. Their partnership agreement calls for a 5% interest allowances on the partners capital balances with the remaining income or loss to be allocated equally. If the partnership reports income of $174,000 for its first year, what amount of income credited to Krugs capital account? AnswerBadger and Fox are forming a partnership. Badger invests a building that has a market value of $350,000 the partnership assumes responsibility for a $125,000 note secured by a mortgage on the property. Fox invests $100,000 in cash and equipment that has a market value of $75,000. For the partnership, the amounts recorded for total assets and for total capital account a re AnswerIn a partnership agreement, if partners agreed to an interest allowance of 10% annually on each partners investment, the interests allowance Answer Can make up for unequal capital contributionsWhen a partner is unable to pay a capital deficiency Answer The deficiency is absorbed by the remaining partners before distribution of cash. Chase and Hatch are partners and share equally in income or loss. Chases current capital balance is $135,000 and Hatchs is $120,000. Chase and Hatch agree to accept Flax with a 30% interest in the partnership. Flax invests $115,000 in the partnership. The amount credited to Flaxs capital account is Answer $111,000135,000 +120,000 = 255,000255,000 + 115,000 = 370,000370,000*30% = 111,000Chase and Hatch are partners and share equally in income or loss. Chases current capital balance is $135,000 and Hatchs is $120,000. Chase and Hatch agree to accept Fax with a 30% interest in the partnership. Flax invests $115,000 in the partnership. The balances in Chases and Hatchs capital accounts subsequently admission of the new partner equal AnswerThe following tuition is available regarding John Smiths capital account in Technology Consulting Group, a general partnership, for a recent year branch of the year balance $22,000His share of partnership income $8,500Withdrawals made during the year $6,000What is smiths partner return on equity during the year in question? Answer 36.6%22,000+8,500-6,000=24,5008,500/(22,000+24,500)/2=.3655=36.6%