ACCOUNTING-Presented below is information related to ZZZ Company for 2014

Question 1: Presented below is information
related to ZZZ Company for 2014. (All balances are normal.)
For this exam, omit all general journal
entry explanations. Ensure to include correct dollar
signs, underlines & double underlines, when required. Ensure to use proper
financial document format details such as blank lines where required. Unless
otherwise noted, all fiscal years end on December 31.

Retained earnings balance, January 1,
2014

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$980,000

Sales for the year

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25,000,000

Cost of goods sold

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17,000,000

Interest revenue

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70,000

Selling and administrative expenses

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4,700,000

Write-off of goodwill (not tax
deductible)

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820,000

Income taxes for 2014

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905,000
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Gain on the sale of investments (normal
recurring)

110,000
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Loss due to flood damage—extraordinary
item (net of tax)

390,000

Loss on the disposition of the wholesale
division

.png”>815,000

Loss on operations of the wholesale
division

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200,000

Income tax benefit from discontinued
wholesale division

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285,000

Dividends declared on common stock

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250,000

Dividends declared on preferred stock

50,000

ZZZ Company decided to discontinue its
entire wholesale operations and to retain its manufacturing operations. On
September 15, ZZZ sold the wholesale operations to Mothers Milk Company. During
2014, there were 200,000 shares of common stock outstanding all year.
Requirement: Prepare a multistep income
statement.

Question 2: 
On June 1, 2014, Mothers tea
purchased a manufacturing machine for $864,000. The machine has an eight-year
estimated life and a $44,000 estimated salvage value. Mothers tea expects to
manufacture 1,800,000 units over the life of the machine.
Required: Complete
the required depreciation schedules on the manufacturing machine for each
method listed. (Do not provide any supporting calculations.)
The additional production information is as
follows:

Year

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Production
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2014

110,000

2015

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300,000

2016

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350,000

2017

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350,000

2018

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500,000

2019

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450,000
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2020

375,000

2021

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400,00

Schedules for:

a. Straight-line.

Year

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Depreciation Expense

Accumulated Depreciation

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End of Year Book Value

2014

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2015

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2016

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b.
Double-declining balance.

Year

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Depreciation Expense

Accumulated Depreciation

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End of Year Book Value

2014
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2015

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2016

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2017
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2018

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2019
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2020

2021

2022

c. Sum-of-the-years’ digits.

Year

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Depreciation Expense

Accumulated Depreciation

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End of Year Book Value

2014

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2015

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2016

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2017

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2018

2019

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2020

2021

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2022

d. Units of production.

Year

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Depreciation Expense

Accumulated Depreciation

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End of Year Book Value

2014

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2015

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2016

2017

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2018

2019

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2020

2021

Question 3:
Selected accounts included in
the property, plant, and equipment section of ABC Corporation’s balance sheet
at December 31, 2014, had the following balances:

Land

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$ 400,000

Land improvements

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130,000
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Buildings

2,000,000
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Machinery and

800,000
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During
2015, the following transactions occurred:
a)
A
tract of land was acquired for $200,000 as a potential future building site
from VAN Corp.
b)
A
plant facility consisting of land and building was acquired from HELP Company
in exchange for 20,000 shares of ABC’s common stock. On the acquisition date, ABC’s
stock had a closing market price of $42 per share on a national stock exchange.
The plant facility was carried on HELP’s books at $178,000 for land and
$520,000 for the building at the exchange date. Current appraised values for
the land and the building, respectively, are $200,000 and $800,000. The
building has an expected life of forty years with a $20,000 salvage value.
c)
Items
of machinery and equipment were purchased from Somewon Who Equipment at a total
cost of $400,000. Additional costs were incurred as follows: freight and
unloading, $13,000; installation, $26,000. The equipment has a useful life of
ten years with no salvage value.
d)
Expenditures
totaling $ 120,000 were made for new parking lots, street, and sidewalks at the
corporation’s various plant locations. These expenditures had an estimated
useful life of fifteen years.
e)
Research
and development costs were $110,000 for the year.
Required:
Indicate the capitalized cost of each asset acquired during 2015. Prepare the
General Journal entries for any amortization and depreciation expense recorded
for each of the acquired items in 2015. If no entry is necessary, write
“no entry.”

Question 4:
Selected accounts included in the property,
plant, and equipment section of Brothers Corporation’s balance sheet at
December 31, 2017, had the following balances:

Land

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$ 400,000

Land improvements

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130,000

Buildings

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2,000,000
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Machinery and equipment

800,000

During 2018, the following transactions
occurred:

>> A machine
costing $18,000 on July 1, 2011, was scrapped on
June
30, 2018. Straight-line depreciation had been recorded on
the basis of a 10-year life with no salvage value.

>> A machine
was sold for $38,000 on July 1, 2018. Original cost of
the machine was $74,000 on January 1, 2015, and it
was depreciated on the sum-of-the-years’ digits basis over an estimated useful
life of eight years and a salvage value of $2,000.


Required:


a.
Calculate the gain or loss on the disposal of each asset. Place your answer in
the
appropriate column.


b. Prepare the journal
entries for the disposal & sale of the machine during 2018. Year 2018
depreciation has yet been recorded.


Question 1:

Earnings per share::

Question2:

Schedules for:

a. Straight-line.

Year

Depreciation Expense

Accumulated Depreciation

End of Year Book Value

2014

2015

2016

b. Double-decliningbalance.

Year

Depreciation
Expense

Accumulated
Depreciation

End of
Year Book Value

2014

2015

2016

2017

2018

2019

2020

2021

2022

c. Sum-of-the-years’digits.

Year

Depreciation
Expense

Accumulated
Depreciation

End of
Year Book Value

2014

2015

2016

2017

2018

2019

2020

2021

2022

d. Unitsofproduction.

Year

Depreciation Expense

Accumulated Depreciation

End of Year Book Value

2014

2015

2016

2017

2018

2019

2020

2021

Question 3: Capitalized Cost:

Capitalized
Cost

LandacquiredfromVANCorp.

LandacquiredfromHELP

BuildingacquiredfromHELP

Machineryandequipmentacquiredfrom
SOMEWON WhoEquipment

Landimprovements

Researchanddevelopment

General Journal
Entries:

Date

Account

Debit

Credit

Date

Account

Debit

Credit

Question 4:

Required:

a. Calculatethegainorlossonthedisposalofeachasset.Placeyouranswerintheappropriatecolumn.

Item

Amountofgain

Amountofloss

Scrappedmachineon6/30/18

Saleofmachineon7/1/18

b. Preparethejournalentriesforthe disposal &saleofthemachine during 2018. Year 2018depreciation has yet been recorded.

Date

Account

Debit

Credit

Date

Account

Debit

Credit

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