Questions from Financial Accounting

Q: Montana Mining Co. pays $3,721,000 for

Montana Mining Co. pays $3,721,000 for an ore deposit containing 1,525,000 tons. The company installs machinery in the mine costing $213,500. Both the ore and machinery will have no salvage value afte...

Q: A company pays $760,000 cash to acquire an iron

A company pays $760,000 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $60,000 cash to access the mine, which is estimated to hold 100,000 tons of iron. Th...

Q: Equipment has a book value of $16,000 and a

Equipment has a book value of $16,000 and a fair value of $14,750. The decline in value meets the impairment test. Prepare the entry to record this $1,250 impairment.

Q: Milano Gallery purchases the copyright on a painting for $418,

Milano Gallery purchases the copyright on a painting for $418,000 on January 1. The copyright is good for 10 more years, after which the copyright will expire and anyone can make prints. The company p...

Q: Robinson Company purchased Franklin Company at a price of $2,

Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of the net assets purchased equals $1,800,000. 1. What is the amount of goodwill that Robinson records at th...

Q: Selected accounts from Gregor Co.’s adjusted trial balance for the

Selected accounts from Gregor Co.’s adjusted trial balance for the year ended December 31 follow. Prepare a classified balance sheet.

Q: Lok Co. reports net sales of $5,856,

Lok Co. reports net sales of $5,856,480 for Year 2 and $8,679,690 for Year 3. End-of-year balances for total assets are Year 1, $1,686,000; Year 2, $1,800,000; and Year 3, $1,982,000. (a) Compute Lok’...

Q: Troy’s long-term available-for-sale portfolio at the

Troy’s long-term available-for-sale portfolio at the start of this year consists of the following. Troy enters into the following transactions involving its available-for-sale debt s...

Q: Gilly Construction trades in an old tractor for a new tractor,

Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in allowance and paying the remaining $83,000 in cash. The old tractor had cost $96,000 and had accumulated dep...

Q: On January 2, Bering Co. disposes of a machine costing

On January 2, Bering Co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625. Prepare the entries to record the disposal under each separate situation. 1. The machine is sol...