Questions from Financial Accounting

Q: Taylor Company purchased equipment for $27,500. It depreciated

Taylor Company purchased equipment for $27,500. It depreciated the equipment over a 5-year life by the double-declining-balance method until the end of the second year, at which time the asset was sol...

Q: Miller Mining acquired rights to a tract of land with the intent

Miller Mining acquired rights to a tract of land with the intent of extracting from the land a valuable mineral. The cost of the rights was $2,500,000 and an estimated 10,000 tons of the mineral are e...

Q: M. C. Jones purchased a truck for $30,

M. C. Jones purchased a truck for $30,500 to be used in his business. He is considering depreciating the truck by two methods: units-of-output (assuming total miles to be driven of 80,000) and double-...

Q: Swanson & Hiller, Inc., purchased a new machine on September

Swanson & Hiller, Inc., purchased a new machine on September 1 of the current year at a cost of $108,000. The machine’s estimated useful life at the time of the purchase was five years, and its residu...

Q: Amigos, Inc., purchased a used piece of heavy equipment for

Amigos, Inc., purchased a used piece of heavy equipment for $30,000. Delivery of the equipment to Amigos’ business site cost $750. Expenditures to recondition the equipment and prepare it for use tota...

Q: Twin-Cities, Inc., purchased a building for $600

Twin-Cities, Inc., purchased a building for $600,000. Straight-line depreciation was used for each of the first two years using the following assumptions: 25-year estimated useful life, with a residua...

Q: Messer Company purchased equipment for $24,000. The company

Messer Company purchased equipment for $24,000. The company is considering whether to determine annual depreciation using the straight-line method or the declining-balance method at 150 percent of the...

Q: On February 1, Willmar Corporation borrowed $100,000 from

On February 1, Willmar Corporation borrowed $100,000 from its bank by signing a 12 percent, 15-year note payable. The note calls for 180 monthly payments of $1,200. Each payment includes an interest a...

Q: Ramón’s Jewelers has accumulated the following budgeted overhead information (dollar amounts

Ramón’s Jewelers has accumulated the following budgeted overhead information (dollar amounts may include both fixed and variable costs). Use this information to create...

Q: Sales on account for the first two months of the current year

Sales on account for the first two months of the current year are budgeted as follows. All sales are made on terms of 2/10, n/30 (2 percent discount if paid in 10 days, full amount by 30 days); colle...