Property Acquisition and Cost Recovery McGraw-Hill Connect Homework Answers 40. [LO 1] Emily purchased a building to store inventory for her business. The purchase price was $760‚000. Beyond this‚ Emily incurred the following necessary expenses to get the building ready for use: $10‚000 to repair the roof‚ $5‚000 to make the interior suitable for her finished goods‚ and $300 in legal fees. What is Emily’s cost basis in the new building? $765‚300 cost basis‚ computed as follows:
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Transaction (a): Transaction (b): Transaction (c): Transaction (d): Accounts Receivable (debit)‚ Service Revenue (credit). Cash (debit)‚ Accounts Receivable (credit). Supplies (debit)‚ Accounts Payable (credit). Delivery Expense (debit)‚ Cash (credit). 4. Revenue and expense accounts are referred to as temporary or nominal accounts because each period they are closed out to Income Summary in the closing process. Their balances are reduced to zero at the end of the accounting period; therefore
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e EDouble entry - Income statement 1. Sales When sales are made‚ capital increases by the amount of profit made on the sale. 2. Expenses When ongoing costs‚ such as wages or rent are incurred‚ capital decreases. 3. Income and expense accounts Periodically‚ usually once a year‚ the figure of profit (income - minus expenses) is added to capital. During the year figures are accumulated in separate accounts for each item of income and expenditure. 4. Cost of sales At the end of the year‚ the
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one year‚ but will not last indefinitely. These are some examples of long-lived non-monetary assets. When these assets were acquired‚ the company has made an expenditure. If the company will benefit in the curret period‚ the cost of the goods are expenses. If the benefits are expected in future periods‚ the costs are assets during the current period and the expenditures are capitalized. The cost of these non-monetary assets should be matched with the revenues that are obtained from its use in the
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A. Explain the conventional accounting concept of depreciation accounting. Depreciation is described as a process of systematic and rational cost allocation. The depreciation process is depreciation base‚ useful service life‚ and depreciation methods. Depreciation accounting is a system of accounting that aims the distributed cost value to the less salvage value‚ other basic value of tangible capital assets‚ over the estimated useful life of a unit. It’s process of allocation and not valuation
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Exercises and Problems XACC/291 Principles of Accounting II Week 2 February 8‚ 2015 Exercise E9-1 The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011 (determine cost of the plant acquisitions). 1. Paid $5‚000 of accrued taxes at time plant site was acquired. 2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. 3. Paid $850 sales taxes on new delivery
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Dr Cr Inventory Accounts Payable Accounts Receivable Sales COGS Inventory Cash Accounts Receivable Accounts Payable Cash Misc. Expenses Cash Salaries Expense Cash Depreciation Expense Accumulated Depreciation Long-‐term loan Cash $ 8 250 11 000 7 700 19 000 11 000 1 500 2 600
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Financial Reporting under IFRS and US GAAP | | | University of Economics in Prague | | | Financial Reporting under IFRS and US GAAP | Property‚ Plant and Equipment Content Introduction - The companies 2 Specific Questions 5 Sources 19 Introduction - The companies AUTOMOTIVE INDUSTRY GENERAL MOTORS as representative of U.S. GAAP General Motors from the U.S. Detroit is‚ together with Toyota‚ the largest car manufacturer in the world. The company was established in 1908
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long- lived asset? Explain for a least two types of such assets. Add the original price of your investment and any transaction costs. For example‚ if you buy 100 shares of stock at $10 per share and pay a $20 broker’s commission‚ your purchase expense totals $1‚020. Disregard dividends or other income you receive as cash while you own the investment. Dividends or interest are classified (and taxed) by the Internal Revenue Service as ordinary income and do not increase or decrease your cost basis
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To record this period’s earning of prior unearned revenue. C. To record payment of an accrued expense. D. To record receipt of an accrued revenue. E. To record an accrued expense. F. To record an accrued revenue G. To record this period’s use of a prepaid expense. H. To record payment of a prepaid expense. I. To record this period’s depreciation expense. ______ 1. Interest Expense 600 Interest Payable 600 ______ 2. Interest Payable 600 Cash
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