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Question: On January 1 of the current year,


On January 1 of the current year, Minguss Manufacturing Company purchased a metal cutting and polishing machine at a cost of $4,000,000. The installation and delivery costs amounted to $250,000. The firm expects the machine to be productive for a total of 5 years and a residual value of $500,000 at the end of the asset’s useful life.

Required:
Prepare the depreciation schedules for the machine assuming that the following methods were used (each case is independent):
1. Straight-line method.
2. Double-declining balance method (DDB). (Reduce the depreciation expense in the last year to the necessary amount to arrive at an ending book value equal to the scrap value.)


> What is the difference between pledging accounts receivable and assigning accounts receivable in a secured borrowing transaction?

> Does the aging of accounts receivable method of estimating the allowance for uncollectible accounts provide a more accurate measurement of net accounts receivable than bad debt expense? Explain

> How does an entity record a subsequent recovery of an account previously written off?

> Under the allowance method, will the actual write-off of an uncollectible account have a net effect on the financial statements? Explain.

> Do accountants typically measure accounts receivable by discounting them for the time value of money? Explain.

> How is cash held as a compensating balance reported on the balance sheet?

> Do companies always classify cash as a current asset on the balance sheet? Explain.

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> What are cash equivalents?

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> Using the information provided in BE9-12, prepare the journal entry to record the year-end adjusting entry for the bad debt expense assuming that Burl Brothers recovered $12,000 of the $51,000 write-offs during the year Data from BE9-12:

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> What are the three criteria required to recognize revenue when goods and services are transferred over time?

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> What methods allocate the total transaction price to performance obligations?

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> What factors should accountants consider to determine if there is a significant financing component in a contract?

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> Burl Brothers provided the following information regarding its accounts receivable at the beginning of the current year: During the year, the company reported net credit sales of $21,000,000 of which it collected $9,900,000. The company wrote off $51,00

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> What are the five basic steps in revenue recognition?

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