Author: Anonymous

Jak Co. has provided the following 20X5 current account balances for the preparation of the annual Statement of Cash Flows: 1-Jan 31-Dec Accounts receivable $15,400 $16,800 Allowance for uncollectible accounts 500 650 Prepaid rent 7,800 6,500 Accounts payable 9,100 10,800 Jak’s 20X5 net income is $81,000. Net cash provided by operating activities in the Statement of Cash Flows should be

In calculating earnings per share, companies deduct preferred dividends from net income if:

At the close of its first year of operations, December 31, 2020, Old Main Industries had accounts receivable of $9,845000, after deducting the related allowance for doubtful accounts. During 2020, the company had charges to bad debt expense of $218,000 and wrote off, as uncollectible, accounts receivable of $219,000. What should the company report on its balance sheet at December 31, 2020, as accounts receivable before the allowance for doubtful accounts?

Perry Corp. acquired a tract of land containing an extractable natural resource. Perry is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 2,850,000 tons, and that the land will have a value of $640,000 after restoration. Relevant cost information follows: Land  $       6,850,000 Estimated restoration costs  $       1,260,000 If Perry maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?

Perry Corp. acquired a tract of land containing an extractable natural resource. Perry is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 2,850,000 tons, and that the land will have a value of $760,000 after restoration. Relevant cost information follows: Land  $       7,650,000 Estimated restoration costs  $       1,090,000 If Perry maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material?

Maroon Corp. purchased factory equipment that was installed and put into service January 1, 2020, at a total cost of $164,000. Salvage value was estimated at $12,000. The equipment is being depreciated over five years using the double-declining balance method. For the year 2021, Maroon should record depreciation expense on this equipment of

Dawg Corporation exchanges one plant asset for a similar plant asset and gives cash in the exchange. The exchange is not expected to cause a material change in the future cash flows for either entity. If a gain on the disposal of the old asset is indicated, the gain will

EXTRA CREDIT: 4.6 points Presented below is information related to equipment owned by Stark Company at December 31, 2020. Cost $12,500,000 Accumulated depreciation to date $  1,340,000 Expected future net cash flows $  8,700,000 Fair value $  5,740,000 Assume that Stark will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Fill in the missing amounts and choose the correct option. For Stark company, the recoverability test compares $[1] to $[2]. As a result, the asset [3] the recoverability test, because [4] is/are less than [5], so a [6] on impairment is recorded in 2020. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.) [7] [8]       [9] [10]   Prepare the journal entry to record depreciation expense for 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.) [11] [12]       [13] [14]   The fair value of the equipment at December 31, 2021 is $5,540,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.) [15] [16]       [17] [18]

Companies frequently use the composite approach when the assets are similar in nature and have approximately the same useful lives.

The following information relates to a patent owned by Scott Company: Cost  $      2,874,000 Carrying amount  $      1,532,000 Expected future net cash flow  $      1,496,000 Fair value  $      1,045,000 Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2019, assuming Scott will continue to use the asset in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Round to the nearest dollar. Do NOT use a dollar sign in your answer.) Account Titles and Explanation   DR ($) CR ($) [DrT]      [DR]       [CrT]       [CR]   Using the same assumption as part (a) above, prepare the journal entry to record amortization expense for 2020 assuming the asset has a remaining useful life of 4 years at the beginning of 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Round to the nearest dollar. Do NOT use a dollar sign in your answer.) Account Titles and Explanation   DR ($) CR ($) [DrTb]         [DRb]       [CrTb]        [CRb]   Using the same assumption as part (a) above, prepare the journal entry (if any) at December 31, 2020, assuming the fair value of the asset has increased to $1,248,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Round to the nearest dollar. Do NOT use a dollar sign in your answer.) Account Titles and Explanation   DR ($) CR ($) [DrTc]          [DRc]       [CrTc]       [CRc]   Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2019, assuming Pharoah ceased using the patent at the end of 2019 and intends to dispose of the patent in the coming year. Pharoah expects to incur a $11,600 cost of disposal. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Round to the nearest dollar. Do NOT use a dollar sign in your answer.) Account Titles and Explanation   DR ($) CR ($) [DrTd]          [DRd]       [CrTd]        [CRd]