Questions from General Accounting

Q: On September 1, 2022, a commercial tenant paid its landlord

On September 1, 2022, a commercial tenant paid its landlord $18,000 in cash as an advance rent payment on its store location. The six-month lease period ends on February 28, 2023, at which time the co...

Q: In 2019, Trader Co. acquired a parcel of land for

In 2019, Trader Co. acquired a parcel of land for a cash purchase price of $175,000 with the intention of building a retail store in the near future. In late 2020, in the midst of the COVID-19 crisis,...

Q: Fesco Jewelers Ltd. Purchased store fixtures, display cases, and

Fesco Jewelers Ltd. Purchased store fixtures, display cases, and a maximum-security commercial safe for a lump-sum price of $18,000 from a bankrupt competitor. Appraised values were as follows: store...

Q: Stucki Holdings Corp. incurred the following expenditures: $5,

Stucki Holdings Corp. incurred the following expenditures: $5,700 cost to replace the transmission in a company-owned vehicle; $19,300 cost of annual property insurance on the company’s production fac...

Q: Gandolfi Construction Co. purchased a CAT 336DL earth mover at a

Gandolfi Construction Co. purchased a CAT 336DL earth mover at a cost of $1,200,000 in January 2022. The company’s estimated useful life of this heavy equipment is 10 years, and the estimated salvage...

Q: Assume that Gandolfi Construction Co. calculated depreciation expense for the CAT

Assume that Gandolfi Construction Co. calculated depreciation expense for the CAT 336DL earth mover on the straight-line method and reported $950,000 of net income for the year ended December 31, 2022...

Q: At the beginning of the year, the net assets of Shannon

At the beginning of the year, the net assets of Shannon Co. were $492,600. The only transactions affecting stockholders’ equity during the year were net income of $70,200 and dividends of $15,400. Req...

Q: Creations Unlimited purchased camera equipment for its photo studio on January 6

Creations Unlimited purchased camera equipment for its photo studio on January 6, 2022, at a cost of $17,000. The equipment had a four-year useful life and an estimated salvage value of $3,000. The eq...

Q: Backstreets Co. recently acquired all of Jungleland Inc.’s net

Backstreets Co. recently acquired all of Jungleland Inc.’s net assets in a business acquisition. The cash purchase price was $9.4 million. Jungleland’s assets and liabilities had the following apprais...

Q: Congratulations! You have just won $2 billion in the largest

Congratulations! You have just won $2 billion in the largest Powerball jackpot payoff ever! You will receive payments of $100,000,000 per year for the next 20 years. Required: Using a present value ta...