Depending on the depreciation method that they choice to use‚ it will reflect the estimate. As noted in the book‚ “when a company changes the way it depreciates an asset in midstream‚ the change would be made to reflect a change in‚ either an estimated future benefit from the asset‚ the patterns of receiving those benefits‚ or the company’s knowledge about those benefits” (McGraw-Hill Companies‚ 2010). When this company changes there previous estimate‚ they don’t have to amend their prior financial
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Accumulated depreciation $(170‚000) $(100‚000) Total assets $750‚000 $730‚000 Accounts payable $250‚000 $210‚000 Income taxes payable $40‚000 $10‚000 Common stock $240‚000 $240‚000 Retained earnings $220‚000 $270‚000 Total liabilities & stock‚ equity $750‚000 $730‚000 The firm’s accrual-basis income statement revealed the following data: Sales $1‚200‚000 Cost of goods sold $800‚000 selling and administrative expenses $250‚000 Depreciation expense
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“Financial statements are like fine perfume; to be sniffed but not swallowed.” - Abraham Briloff (Professor Emeritus of CUNY Baruch) ACCOUNTING: Accounting is defined by the American Institute of Certified Public Accountants (AICPA) as "the art of recording‚ classifying‚ and summarizing in a significant manner and in terms of money‚ transactions and events which are‚ in part at least‚ of financial character‚ and interpreting the results thereof." ACCOUNTING AND ITS ROLE IN SOCIETY:
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but not for July.) OFF-CAMPUS THEATER Unadjusted Trial Balance July 31‚ 2002 Cash $ 16‚200 Prepaid film rental 28‚000 Land 100‚000 Building 240‚000 Accumulated depreciation: building $ 16‚000 Fixtures and equipment 12‚000 Accumulated depreciation: fixtures and equipment 3‚000 Notes payable 190‚000 Accounts payable 3‚200 Unearned admissions revenue (YMCA) 1‚200 Income taxes payable 6‚100 Capital Stock
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plant asset occurs during the year‚ depreciation is not recorded for the year. recorded for the whole year. recorded for the fraction of the year to the date of the disposal. Question 5 0.5 / 0.5 points Land improvements should be depreciated over the useful life of the land. buildings on the land. land or land improvements‚ whichever is longer. land improvements. Question 6 0 / 0.5 points Book value is Cost minus accumulated depreciation. Cost minus salvage value. An estimate
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CHAPTER 11 Depreciation‚ Impairments‚ and Depletion EXERCISE 11-4 (15–25 minutes) (a) $315‚000 – $15‚000 = $300‚000; $300‚000 ÷ 10 yrs. = $30‚000 (b) $300‚000 ÷ 240‚000 units = $1.25; 25‚500 units X $1.25 = $31‚875 (c) $300‚000 ÷ 25‚000 hours = $12.00 per hr.; 2‚650 hrs. X $12.00 = $31‚800 (d) 10 + 9 + 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1 = 55 OR n(n + 1) = 10(11) = 55 2 2 10 X $300‚000 X 1/3 = $18‚182 55 9 X $300‚000 X 2/3 = 32‚727 55 Total for 2015 $50‚909 (e) $315‚000 X 20% X
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a machine dealer for $25‚000. Lassen bought the machine for $55‚000 and has claimed $15‚000 of depreciation expense on the machine. What gain or loss does Lassen realize on the transaction? ($15‚000) loss‚ computed as follows: Description | Amount | Explanation | (1) Amount Realized | $25‚000 | Given | (2) Adjusted Basis | 40‚000 | $55‚000 original basis - $15‚000 accumulated depreciation | Gain (Loss) Realized | ($15‚000) | (1) – (2) | 37. [LO 3‚ 4] In year 0‚ Longworth Partnership
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shelving in order to renovate the store. If they sell‚ they expect to receive $14‚000 for the shelving. Which of these is TRUE about the shelving? a. The accumulated depreciation at the point of sale will be $41‚000. b. The gain on sale of shelving will be $1‚000. c. The entry to record the sale will debit the accumulated depreciation account by $55‚000. d. The asset received is a $1‚000 more than the asset removed. Disposal: Compare book value ($15‚000) to proceeds ($14‚000) to see you have a
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CHAPTER 11 Internal Service Funds ANSWERS TO QUESTIONS Question 11-1 Among the advantages to the unit establishing such an Internal Service Fund are the following: 1. Centralized purchasing. Centralized purchasing might permit a more qualified purchasing agent to be employed; lead to the acquisition of better goods for the same price or goods of equal quality to those now being acquired at a lower price; result in better control of quantities ordered; increase both the quantity discounts received
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YOU DON’T The case of Jet Airways and its Accounting Policies Presentation Outline 1. Jet Airways - Company Background 2. Airline Industry Background 3. Main Issues a. Highlights of First Quarter 2008 Results b. 1st New Policy: Adoption of New Depreciation Method c. 2nd New Policy: Foreign Currency Exchange Differences d. 3rd New Policy: Revaluation of Fixed Assets 4. Summary 2 Company Background India’s largest private domestic and international airline Promoted by Naresh Goyal‚ its founder
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