Liberty University ACCT 301 Quiz 4 complete solutions answers and more

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Cutter Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $3,300. Using the sum-of-the-years'-digits method, d... epreciation for 2022 and book value at December 31, 2022, would be: (Do not round depreciation rate per year) Archie Co. purchased a framing machine for $45,000 on January 1, 2021. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the double-declining-balance method, depreciation for 2021 and book value at December 31, 2021, would be: Depreciation: In its 2021 annual report to shareholders, Buffalo Burgers Company, Inc., included the following in a disclosure note: E. Property, Plant, and Equipment Property, plant, and equipment for the years ended December 28, 2021, and December 29, 2020, consisted of the following ($ in thousands): 2021 2020 Machinery and plant equipment $259,664 $183,828 Kegs 60,350 46,899 Land 23,260 24,515 Building and building improvements 44,234 36,667 Office equipment and furniture 14,581 12,580 Leasehold improvements 7,600 6,193 409,689 310,682 Less: accumulated depreciation 143,131 120,734 $266,558 $189,948 The Company recorded depreciation related to these assets of $23,565 in the 2021 fiscal year. Also, Buffalo Burgers reported the following information in the annual report ($ in thousands): Yearsended 12/28/2021 12/29/ Cash flows for investing activities: Purchases of property, plant, and equipment $(100,655) $ (66, Proceeds on disposal of property, plant, and $ 18 $ equipment Required: Prepare the journal entry to record Buffalo Burgers' sale of property, plant, and equipment during 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Canliss Mining uses the retirement method to determine depreciation on its office equipment. During 2019, its first year of operations, office equipment was purchased at a cost of $12,000. Useful life of the equipment averages four years and no salvage value is anticipated. In 2021, equipment costing $4,600 was sold for $510 and replaced with new equipment costing $8,100. Canliss would record 2021 depreciation of: Cutter Enterprises purchased equipment for $54,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $8,100. Using the straight-line method, depreciation for 2021 would be: On June 30, 2021, Prego Equipment purchased a precision laser-guided steel punch that has an expected capacity of 308,000 units and no residual value. The cost of the machine was $369,600 and is to be depreciated using the units-of-production method. During the six months of 2021, 32,000 units of product were produced. At the beginning of 2022, engineers estimated that the machine can realistically be used to produce only another 220,800 units. During 2022, 78,000 units were produced. Prego would report depreciation in 2022 of: Cutter Enterprises purchased equipment for $72,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $6,000. Using the straight-line method, depreciation for 2022 and the equipment’s book value at December 31, 2022, would be: Losses on the cash sales of property, plant, and equipment: Cutter Enterprises purchased equipment for $72,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $6,000. Using the straight-line method, the book value at December 31, 2021, would be: Cutter Enterprises purchased equipment for $72,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $6,000. Using the straight-line method, depreciation for 2021 would be: Holiday Laboratories purchased a high-speed industrial centrifuge at a cost of $390,000. Shipping costs totaled $22,000. Foundation work to house the centrifuge cost $7,800. An additional water line had to be run to the equipment at a cost of $3,800. Labor and testing costs totaled $6,700. Materials used up in testing cost $3,900. The capitalized cost is: Holiday Laboratories purchased a high-speed industrial centrifuge at a cost of $420,000. Shipping costs totaled $15,000. Foundation work to house the centrifuge cost $8,000. An additional water line had to be run to the equipment at a cost of $3,000. Labor and testing costs totaled $6,000. Materials used up in testing cost $3,000. The capitalized cost is: Interest is eligible to be capitalized as part of an asset’s cost, rather than being expensed immediately, when: A distinguishing characteristic of intangible assets is that the extent and timing of their future benefits typically are highly uncertain. Bloomington Inc. exchanged land for equipment and $2,900 in cash. The book value and the fair value of the land were $104,000 and $90,000, respectively. Assuming that the exchange has commercial substance, Bloomington would record equipment and a gain/(loss) on exchange of assets in the amounts of: Equipment Gain/(loss) a. $ 87,100 $ 2,900 b. $104,000 $ (2,900) c. $ 87,100 $(14,000) d. None of these answer choices are correct. During 2021, the Longhorn Oil Company incurred $4,900,000 in exploration costs for each of 20 oil wells drilled in 2021 in west Texas. Of the 20 wells drilled, 13 were dry holes. Longhorn uses the successful efforts method of accounting. Assuming that none of the oil found is depleted in 2021, what oil exploration expense would Longhorn charge for this activity in its 2021 income statement? Russell Enterprises acquired a franchise from Michael Incorporated for $300,000. The franchise agreement is for a period of six years. Russell uses straight-line to amortize all intangible assets. What would be the reported book value of the franchise two years after the purchase? Cutter Enterprises purchased equipment for $69,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $7,200. Using the straight-line method, the book value at December 31, 2021, would be: [Show More]

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