………………………………………………………… Sales taxes ……………………………………………………………… Installation of furniture ………………………………………………… Cost of repair furniture damaged during installation …………………… $11‚000 375 550 75 400 Instructions a. Compute depreciation expense for the years 2011 through 2014 under each depreciation method listed below: 1. Straight-line‚ with fractional years rounded to the nearest whole month. 2. 200 percent declining-balance‚ using the half-year convention. 3. 150 percent declining-balance‚ using the
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prepare the journal entry for the current tax liability in each of the following four cases. Case 1 Case 2 Case 3 Case 4 Accounting profit (loss) After debiting as expense: Goodwill impairment loss* Entertainment costs* Donation to political party* Depreciation expense – plant Long-service leave expense For tax purposes: Tax depreciation for plant Long-service leave paid *These items are non-deductible for tax purposes. Assume a tax rate of 30%. $40 000 $20 000 $5 000 $(10 000 ) 6 000 — 1 000
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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 2 Review of the Accounting Process AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools‚ departments‚ and faculty may approach assessment and its documentation differently‚ one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor‚ we have labeled each question‚ exercise and problem in Intermediate Accounting‚ 7e with the following
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AB1102: Accounting 2 Notes Objective of Financial Statements – objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors‚ lenders and other creditors in making decisions about providing resources to the entity. 2 roles of financial reporting: Contracting (backward looking) and Valuation (forward looking) Qualitative Characteristics (QC) of Useful Financial Information - Relevance o Predictive
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following tasks: Prepare two different depreciation schedules for the equipment one using the double-declining balance method‚ and the other using the straight-line method. (Round to the nearest dollar). Determine which method would result in the greatest net income for the year ending December 31‚ 2005. How would taxes affect management’s choice between these two methods for the financial statements? 1. Straight-line Method Depreciation expense = Acquisition cost residual
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Accumulated Depreciation | | | | 100 | | 100 | Notes Payable | | 5000 | | | | 5000 | Account Payable | | 2500 | | 120 | | 2620 | Salaries Payable | | | | 1400 | | 1400 | Unearned Revenue | | 1200 | 1200 | | 1200 | 1200 | C. R. Hill‚ Capital | | 10000 | | | | 10000 | C. R. Hill‚ Drawings | 500 | | | | 500 | | Service Revenue | | 10000 | | 1850 | | 11850 | Salaries Expense | 4000 | | 1400 | | 5400 | | Rent Expense | 900 |
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|72000 | | | |Common Stock | |72000 | |March 1 |Rent Expense |4500 | | | |Cash | |4500 | |March 1
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their views known CA1-3.) 1. D 2. A 3. D 4. B 5. A 6. B 7. A 8. B E2-5.) Assets- F Liabilities- B Equity- I Investment by owners- C Distribution to owners- D‚ K Comprehensive Income- L‚ G‚ E‚ C Revenue- J‚ H Expenses- H Gains- A Losses- A E2-7.) a. Fair value changes are not recognized in the accounting records. HISTORICAL COST PRINCIPLE b. Financial information is presented so that investors will not be misled. FULL DISCLOSURE PRINCIPLE c
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partially determined by revenue‚ a component of that profit reflects a customer’s promise to pay. Cash flow reflects only cash actually received. - Expenses are matched to revenue. An overriding accounting principle is to match the costs and expenses associated with the revenues generated during a given time period. The expenses charged to the income statement may not be those that were actually paid during that period. Many will be paid later when they are invoiced by a vendor. Cash
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