BUSINESS COLLEGE

A company purchased a building for $850,000 on January 1, 2010. As of December 31, 2014, $200,000 of accumulated depreciation had been recorded related to this building. The building was sold to another party for $1,250,000 on January 1, 2015. On the sale of this building, the company should recognize:

Answers

Answer 1

Answer:

Answer: Gain of $600,000

Explanation: As we know that :-

Gain / loss = Sales value - Cost of building

Now, we can compute cost of building on date of sale as follows :-

cost = purchase date cost - accumulated depreciation

= $850,000 - $ 200,000

= $650,000

putting the values into initial equation we get :-

Gain = $1,250,000 - $650,000

= $600,000

Related Questions

On December 31, after adjustments, Gonzalez Company's ledger contains the following account balances: 101 Cash $ 27,200 Dr. 111 Accounts Receivable 15,800 Dr. 121 Supplies 2,000 Dr. 131 Prepaid Rent 38,600 Dr. 141 Equipment 44,000 Dr. 142 Accumulated Depreciation—Equip. 1,000 Cr. 202 Accounts Payable 6,500 Cr. 301 Emilio Gonzalez, Capital (12/1/2019) 45,620 Cr. 302 Emilio Gonzalez, Drawing 6,200 Dr. 401 Fees Income 112,400 Cr. 511 Advertising Expense 3,800 Dr. 514 Depreciation Expense—Equip. 800 Dr. 517 Rent Expense 2,600 Dr. 519 Salaries Expense 18,800 Dr. 523 Utilities Expense 5,720 Dr. Required: Journalize the closing entries in the general journal. Post the closing entries to the general ledger accounts. Hint: Be sure to enter beginning balances. Analyze: What is the balance of the Salaries Expense account after closing entries are posted?
Variance Analysis Question The Glass Vessel Company has established the following budget for producing one of its handblown vases: Materials (silica) 2 pounds @ 1.25 per pound Labor 1.5 hours @ $15.00 per hour In March of the most recent year, Glass Vessel produced 300 vases using 650 pounds of materials. Glass Vessel purchased the 650 pounds of materials for $845. Actual total labor costs for March were $7,200, which entailed 480 hours of labor. Please answer both of the following questions:Materials (silica) 2 pounds @ 1.25 per poundLabor 1.5 hours @ $15.00 per hour1. What was Glass Vessel’s flexible budget variance for materials in March? (As part of your answer, please indicate whether this variance was favorable or unfavorable.)2. What was Glass Vessel’s labor efficiency/usage variance for March? (As part of your answer, indicate whether this variance was favorable or unfavorable.)Must show work
_____ occurs when a creditor obtains a court order that directs an employer to set aside a portion of an employee's wages to pay a debt owed to the creditor.
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. Standard hours per unit of output 5.30 DLHs Standard variable overhead rate $ 11.66 per DLH The following data pertain to operations for the last month: Actual direct labor-hours 8800 DLHs Actual total variable manufacturing overhead cost $ 96,000 Actual output 1500 units What is the variable overhead rate variance for the month
On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the non-defective merchandise, which is restored to inventory. The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Vander must make on September 14 is (are):

The most powerful and widely used conceptual tool for diagnosing the principal competitive pressures in a market isa. the five forces framework.b. PESTEL.c. the driving forces model.d. strategic group mapping.e. SWOT analysis.

Answers

Answer:

The correct answer is letter "A": the five forces framework.

Explanation:

Porter's Five (5) Forces is an analysis scheme created by American economist Michael E. Porter (born in 1947). The ultimate goal of this analysis is to help managers set their expectations of profitability because as competition increases, profitability decreases. Three of the five forces relate to those involved in the industry. The other two apply to the suppliers, the vertical participants, and consumers.

The future value of a dollar 1. increases with lower interest rates
2. increases with higher interest rates
3. increases with longer periods of time
4. decreases with longer periods of time

Answers

Answer:

C. 2 and 3

Explanation:

Note: Options to the question are as follows "A. 1 and 3, B. 1 and 4, C. 2 and 3, D. 2 and 4.

FV = PV(1 + r)^t

Future value of a dollar is the value of a dollar if it earns a certain interest fro a specified time. Future value increases with an increase in interest rates and time. Conversely, it decreases with a decrease in interest rates and time.

Thus, Option c is correct.

The economic way of thinking stresses that good intentions lead to sound policy." How would you evaluate this statement? Check all that apply a. The statement is false because a policy motivated by good intentions may have unintended negative consequences. b. The statement is true because any policy that is backed by good intentions will always lead to beneficial outcomes for all involved c. The statement is true because only policies that have no unintended consequences are enacted by the government d. The statement is false because sound economic reasoning is required to anticipate unintended consequences of policies that are motivated by good intentions.

Answers

Answer:

a. The statement is false because a policy motivated by good intentions may have unintended negative consequences.

d. The statement is false because sound economic reasoning is required to anticipate unintended consequences of policies that are motivated by good intentions.

Explanation:

It is important to have good intentions when creating policies but a sound policy requires more than just good intentions.

To create a sound policy, sound economic principles and reasoning must be employed. This is important to predict and tackle unintended negative consequences that may arise, irrespective of how good the intentions were in creating the policies.

Final answer:

Merely having good intentions does not guarantee sound policy, particularly in economics. Sound economic reasoning is needed to anticipate possible consequences. Thus, the claim that good intentions lead to sound policy in economics is not entirely accurate.

Explanation:

The statement 'The economic way of thinking stresses that good intentions lead to sound policy' is not entirely valid. Merely having good intentions is not enough to ensure a sound policy, especially in an economic context. Economic reasoning is needed to ascertain the possible implications, both positive and negative, of a policy. As such, the elements a. and d. of the given options are correct:

The statement is false because a policy motivated by good intentions may have unintended negative consequences.
The statement is false because sound economic reasoning is required to anticipate unintended consequences of policies that are motivated by good intentions.

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On July 1, 2019, Major Co. pays $15,120 to Mesa Insurance Co. for a 4- year insurance contract. Both companies have fiscal years ending December 31 Journalize and post the entry on July 1 and the adjusting entry on December 31 for Mesa Insurance Co. Mesa uses the accounts Unearned Service Revenue and Service Revenue. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to O decimal places,e.g. 5,275.) Date Account Titles and Explanation Debit Credit Unearned Service Revenue Service Revenue

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Answer:

Debit Cash account $15,120

Credit Unearned Service Revenue $15,120

Being entries to record cash collected for service to be rendered.

Debit Unearned Service revenue $1,890

Credit Service Revenue $1,890

Being entries to recognize revenue earned as at 31 December

Explanation:

When an amount is collected in advance for a service yet to be rendered, the company recognizes and asset in form of cash and a liability in form of Unearned Service Revenue.

When the service for which cash was collected is performed, revenue is said to have been earned. Entries required then are debit Unearned Service Revenue Credit Service revenue.

For Mesa, on 1 July , entries required are

Debit Cash account $15,120

Credit Unearned Service Revenue $15,120

Being entries to record cash collected for service to be rendered.

As at 31 December, revenue earned

= 1/2 × $15120/4

= $1890

Entries required

Debit Unearned Service revenue $1,890

Credit Service Revenue $1,890

Being entries to recognize revenue earned as at 31 December

The journal entries and adjusting entries should be shown below.

Journal entries:

Cash account $15,120

Unearned Service Revenue $15,120

(Being entries to recordcash collected for service to be rendered)

Unearned Service revenue $1,890 ( 1/2 × $15120/4)

Service Revenue $1,890

( to recognizerevenue earned as at 31 December)

These journal entries should be recorded.

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Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Standard Quantity Standard Price (Rate) Standard Unit Cost Direct materials (plastic) 12 sq ft. $ 0.83 per sq. ft. $ 9.96 Direct labor 0.25 hr. $ 10.50 per hr. 2.62 Variable manufacturing overhead (based on direct labor hours) 0.25 hr. $ 2.20 per hr. 0.55 Fixed manufacturing overhead $345,800 ÷ 910,000 units) 0.38 Parker Plastic had the following actual results for the past year: Number of units produced and sold 1,040,000 Number of square feet of plastic used 11,400,000 Cost of plastic purchased and used $ 9,120,000 Number of labor hours worked 308,000 Direct labor cost $ 3,449,600 Variable overhead cost $ 689,000 Fixed overhead cost $ 365,000 Required: Calculate Parker Plastic’s direct materials price and quantity variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Answers

Answer:

Direct Material Price Variance = (Actual price - standard price) x actual quantity purchased

Direct Material Price Variance = ($0.80 - $0.83) x 11400000 = $342000 (F)

Actual Price = $9120000 / 11400000 = $0.80

Direct Material Quantity Variance = (Actual quantity - standard quantity) x Standard Price

Direct Material Quantity Variance = (11400000 - 12480000) x $0.83 = $896400 (F)

Standard Quantity = 1040000 x 12 = 12480000

Final answer:

The direct materials price variance is $342,000 unfavorable and the direct materials quantity variance is $9,351,200 favorable.

Explanation:

To calculate Parker Plastic's direct materials price variance, we need to compare the standard price per unit of direct materials with the actual price per unit. The formula for calculating the price variance is (Actual Price - Standard Price) * Actual Quantity.

Using the given information, the actual price per unit is $0.80 per sq. ft, so the price variance is ($0.80 - $0.83) * 11,400,000 sq. ft = $342,000 U.

To calculate the direct materials quantity variance, we need to compare the standard quantity per unit of direct materials with the actual usage. The formula for calculating the quantity variance is (Actual Quantity - Standard Quantity) * Standard Price.

Using the given information, the actual usage is 11,400,000 sq. ft, so the quantity variance is (11,400,000 - 1,040,000) * $0.83 = $9,351,200 F.

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The sales of Carephase Company for the year are as given below: Quarter 1 $400,000 Quarter 2 $360,000 Quarter 3 $620,000 Quarter 4 $580,000 Fifty percent of the sales of the company are paid in cash. Of the sales on account, 60 percent are collected in the quarter of sale, the remaining 40 percent are collected in the quarter following the sale. Calculate the cash receipts for Quarter 4.