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Accounting Question

Accounting Question

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5-10

 

Internal control of cash receipts

 

 

Obj|2, 3

 

 

 

Kevin Clavin works at the drive-through window of Big Bad Burgers. Occasionally, when a drive-through customer orders, Kevin fills the order and pockets the customer’s money. He does not ring up the order on the cash register.

Identify the internal control weaknesses that exist at Big Bad Burgers, and discuss what can be done to prevent this theft.

 

 

 

E5-11

 

 

Internal control of cash receipts

 

 

 

Obj|2, 3

 

 

The mailroom employees send all remittances and remittance advices to the cashier. The cashier deposits the cash in the bank and forwards the remittance advices and duplicate deposit slips to the Accounting Department.

a.

Indicate the weak link in internal control in the handling of cash receipts.

 

 

b.

How can the weakness be corrected?

 

 

 

 

E5-12

 

Entry for cash sales; cash short

 

 

Obj|2, 3

 

 

The actual cash received from cash sales was $27,199, and the amount indicated by the cash register total was $27,228.

 

 

a.

What is the amount deposited in the bank for the day’s sales?

 

 

b.

What is the amount recorded for the day’s sales?

 

 

c.

How should the difference be recorded?

 

 

d.

If a cashier is consistently over or short, what action should be taken?

 

 

 

 

 

E5-13

 

 

 

Recording cash sales; cash over

The actual cash received from cash sales was $14,356, and the amount indicated by the cash register total was $14,290.

 

 

a.

What is the amount deposited in the bank for the day’s sales?

 

 

b.

What is amount recorded for the day’s sales?

 

 

c.

How should the difference be recorded?

 

 

d.

If a cashier is consistently over or short, what action should

5-15

Torpedo Digital Company, a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Torpedo’s procedures for the purchase of services.

The purchasing agent is responsible for ordering services (such as repairs to a photocopy machine or office cleaning) after receiving a service requisition from an authorized manager. However, since no tangible goods are delivered, a receiving report is not prepared. When the Accounting Department receives an invoice billing Torpedo for a service call, the accounts payable clerk calls the manager who requested the service in order to verify that it was performed.

The fraud scheme involves Ross Dunbar, the manager of plant and facilities. Ross arranged for his uncle’s company, Capo Industrial Supplies and Service, to be placed on Torpedo’s approved vendor list. Ross did not disclose the family relationship.

On several occasions, Ross would submit a requisition for services to be provided by Capo Industrial Supplies and Service. However, the service requested was really not needed, and it was never performed. Capo Industrial Supplies and Service would bill Torpedo for the service and then split the cash payment with Ross.

Explain what changes should be made to Torpedo’s procedures for ordering and paying for services in order to prevent such occurrences in the future.

1.

Bank service charges, $40

2.

Check drawn by company for $480 but incorrectly recorded by company as $840.

 

 

3.

Check for $100 incorrectly charged by bank as $1,000.

 

 

4.

Check of a customer returned by bank to company because of insufficient funds, $975.

 

 

5.

Deposit in transit, $18,800.

 

 

6.

Outstanding checks, $12,200.

 

 

7.

Note collected by bank, $20,500.

 

 

 

 

E5-17

 

 

Entries based on bank reconciliation

 

 

 

Obj|5

 

 

Which of the reconciling items listed in Exercise 5-16 are required to be recorded in the company’s accounts?

 

 

 

E5-16

 

 

Bank reconciliation

 

 

 

Obj|5

 

 

Identify each of the following reconciling items as: (a) an addition to the cash balance according to the bank statement, (b) a deduction from the cash balance according to the bank statement, (c) an addition to the cash balance according to the company’s records, or (d) a deduction from the cash balance according to the company’s records. (None of the transactions reported by bank debit and credit memos have been recorded by the company.)

1.

Bank service charges, $40.

 

 

2.

Check drawn by company for $480 but incorrectly recorded by company as $840.

 

 

3.

Check for $100 incorrectly charged by bank as $1,000.

 

 

4.

Check of a customer returned by bank to company because of insufficient funds, $975.

 

 

5.

Deposit in transit, $18,800.

 

 

6.

Outstanding checks, $12,200.

 

 

7.

Note collected by bank, $20,500.

 

 

 

 

E5-17

 

 

Entries based on bank reconciliation

 

 

 

Obj|5

 

 

Which of the reconciling items listed in Exercise 5-16 are required to be recorded in the company’s accounts?

 

 

 

      E5-18

 

 

 

Bank reconcilliation

 

 

 

Obj|5

 

 

✓ Adjusted balance: $24,500

 

 

The following data were accumulated for use in reconciling the bank account of Camela Co. for July:

 

 

E6-1

Classifications of receivables

Obj|1

Boeing is one of the world’s major aerospace firms, with operations involving commercial aircraft, military aircraft, missiles, satellite systems, and information and battle management systems. As of December 31, 2010, Boeing had $2,969 million of receivables involving U.S. government contracts and $1,241 million of receivables involving commercial aircraft customers, such as Delta Air Lines and United Airlines.

Should Boeing report these receivables separately in the financial statements, or combine them into one overall accounts receivable amount? Explain.

E6-2

 

Determine due date and interest on note

 Feb. 20, $450

Determine the due date and the amount of interest due at maturity on the following notes:

Date of Note Face Amount Interest Rate Term of Note
a. January 6 $40,000     9%  45 days
b. March 23   9,000 10  60 days
c. May 30  12,000 12  90 days
d. August 30  18,000 10 120 days
e. October 1  10,500  8  60 days

E6-3

Nature of uncollectible accounts

MGM Resorts International owns and operates casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. For a recent year, the MGM Resorts International reported accounts and notes receivable of $415,654,000 and allowance for doubtful accounts of $93,760,000.

International Business Machines (IBM) provides information technology services, including software, worldwide. For a recent year, IBM reported accounts receivable of $10,834,000,000 and allowance for doubtful accounts of $324,000,000.

  • a. Compute the percentage of the allowance for doubtful accounts to the accounts and notes receivable for the MGM Mirage.
  • b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for IBM.
  • c. Discuss possible reasons for the difference in the two ratios computed in (a) and (b).

E6-4

Uncollectible accounts, using direct write-off method

Obj|3

Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of MedTech Co., a local hospital supply company that uses the direct write-off method of accounting for uncollectible receivables:

Feb. 14. Received $9,000 on an account and wrote off the remainder owed of $45,000 as uncollectible.
Dec. 23. Reinstated the account that had been written off on February 14 and received $45,000 cash in full payment.

E6-5

Uncollectible receivables, using allowance method

Obj|4

Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of A1 Kitchen Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables:

Jan. 31. Received $8,000 on an account and wrote off the remainder owed of $32,000 as uncollectible.
Nov. 2. Reinstated the account that had been written off on January 31 and received $32,000 cash in full payment.

E6-6

Writing off accounts receivable

Objs|3, 4

Intermountain Technologies, a computer consulting firm, has decided to write off the $11,575 balance of an account owed by a customer. Illustrate the effects on the accounts and financial statements to record the write-off (a) assuming that the direct write-off method is used, and (b) assuming that the allowance method is used.

E6-7

 

Estimating doubtful accounts

Newbury Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2012, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 2012.

E6-8

Entry for uncollectible accounts

Using the data in Exercise 6-7, assume that the allowance for doubtful accounts for Newbury Bikes Co. had a negative balance of 2$3,800 as of December 31, 2012.

Illustrate the effects of the adjustment for uncollectible accounts as of December 31, 2012, on the accounts and financial statements.

E6-9

Providing for doubtful accounts

Newbury Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2012, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

 

 

 

Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 2012.

 

List any errors you can find in the following partial balance:

ZABEL COMPANY

Balance Sheet

December 31, 2012

Assets

Current assets:

Cash

$ 75,000

Notes receivable

$115,000

Less interest receivable

 

 

 

9,000

 

 

106,000

 

Account receivable

 

 

$475,000

 

Plus allowance for doubtful accounts

 

 

11,150

 

486,150

 

Ex: 6-18

 

Lower-of-cost-or-market inventory

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9.

Commodity Inventory Quantity Unit Cost Price Unit Market Price
Buffal  35 $115 $120
Dakota  67   90   75
Frontier   8  300  280
Midwest  83   40   30
Rainbow 100   90   94

 

E7-3

 

Determine cost of land

 $715,725

Express Delivery Company acquired an adjacent lot to construct a new warehouse, paying $80,000 and giving a short-term note for $620,000. Legal fees paid were $1,900, delinquent taxes assumed were $9,000, and fees paid to remove an old building from the land were $6,000. Materials salvaged from the demolition of the building were sold for $1,175. A contractor was paid $800,000 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

E7-4

 

Capital and revenue expenditures

Obj|1

Hometown Delivery Co. incurred the following costs related to trucks and vans used in operating its delivery service:

  • 1. Changed the oil and greased the joints of all the trucks and vans.
  • 2. Changed the radiator fluid on a truck that had been in service for the past four years.
  • 3. Installed a hydraulic lift to a van.
  • 4. Installed security systems on four of the newer trucks.
  • 5. Overhauled the engine on one of the trucks purchased three years ago.
  • 6. Rebuilt the transmission on one of the vans that had been driven 40,000 miles. The van was no longer under warranty.
  • 7. Removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication.
  • 8. Repaired a flat tire on one of the vans.
  • 9. Replaced a truck’s suspension system with a new suspension system that allows for the delivery of heavier loads.
  • 10. Tinted the back and side windows of one of the vans to discourage theft of contents.

Classify each of the costs as a capital expenditure or a revenue expenditure

E7-8 due on 11/12

Straight-line depreciation

Obj|2

 $3,170

A refrigerator used by a meat processor has a cost of $86,750, an estimated residual value of $7,500, and an estimated useful life of 25 years. What is the amount of the annual depreciation computed by the straight-line method?

 

Accounting Question

Accounting Question

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Using the guidance discussed in class as well as materials within the textbook, consider the following 2 ethical cases and respond to the questions noted (total of 7 questions).  Responses will be graded for thoughtfulness and rationale (a yes/no response is not sufficient).  Questions 3, 5, and 6 are worth 2 points each.  All other questions are worth 1 point each.

Ethics Case #1

Banks charge fees for “bounced” checks—that is, checks that exceed the balance in the account. Fees they charge are often around $30 each.  It has been estimated that processing bounced checks costs a bank roughly $1.50 per check. Thus, the profit margin on bounced checks is very high. Recognizing this, some banks have started to process checks from largest to smallest. By doing this, they maximize the number of checks that bounce if a customer overdraws an account. For example, NationsBank (now Bank of America) projected a $14 million increase in fee revenue as a result of processing largest checks first. In response to criticism, banks have responded that their customers prefer to have large checks processed first, because those tend to be the most important. At the other extreme, some banks will cover their customers’ bounced checks, effectively extending them an interest-free loan while their account is overdrawn.

1. Richard Coulsen had a balance of $1,500 in his checking account at First National Bank on a day when the bank received the following five checks for processing against his account.

Check Number Amount Check Number Amount
3150 $  35 3165 $  550
3162  400 3166  1,510
    3169   180

Assuming a $30 fee assessed by the bank for each bounced check, how much fee revenue would the bank generate if it processed checks (1) from largest to smallest, (2) from smallest to largest, and (3) in order of check number?

2. Do you think that processing checks from largest to smallest is an ethical business practice?  Why or why not?

 

3. In addition to ethical issues, what other issues must a bank consider in deciding whether to process checks from largest to smallest?
4. If you were managing a bank, what policy would you adopt on bounced checks?  Why?

 

Ethics Case #2

As its year-end approaches, it appears that Ortiz Corporation’s net income will increase 10% this year. The president of Ortiz Corporation, nervous that the stockholders might expect the company to sustain this 10% growth rate in net income in future years, suggests that the controller increase the allowance for doubtful accounts to 4% of receivables in order to lower this year’s net income. The president thinks that the lower net income, which reflects a 6% growth rate, will be a more sustainable rate of growth for Ortiz Corporation in future years. The controller of Ortiz Corporation believes that the company’s yearly allowance for doubtful accounts should be 2% of receivables.

5. List three stakeholders (companies or people harmed or benefited) in this case?
6. Does the president’s request pose an ethical dilemma for the controller?  Be specific in what dilemmas are present, if any.

 

7. Should the controller be concerned with Ortiz Corporation’s growth rate in estimating the allowance? Explain your answer.

 

Accounting Question

Accounting Question

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Included in the December 31, 2015, Jacobi Company balance sheet was the following shareholders’ equity section:

 

Jacobi   Company

 

Balance   Sheet (Shareholders’ Equity)

 

December   31, 2015

 

1

Contributed Capital:

 

2

Preferred stock, 6%, $100 par

$200,000.00

 

3

Additional paid-in capital on   preferred stock

12,000.00

$212,000.00

 

4

Common stock, $5 par

$150,000.00

 

5

Additional paid-in capital on   common stock

240,000.00

390,000.00

 

6

Total contributed capital

$602,000.00

 

7

Retained earnings

627,000.00

 

8

Accumulated other comprehensive   income (loss):

 

9

Unrealized decrease in value of   available-for-sale securities

(41,000.00)

 

10

Total contributed capital,   retained earnings, and accumulated other comprehensive income

$1,188,000.00

 

11

Less: Treasury stock (1,000   shares of common stock at cost, acquired on 2/3/2015)

(20,000.00)

 

12

Total Shareholders’ Equity

$1,168,000.00

The company engaged in the following stock transactions during 2016:

 

Jan.

4

Paid the semiannual dividend on the outstanding   preferred stock and a $1.60 per share annual dividend on the outstanding   common stock. These dividends had been declared on December 1, 2015.

 

5

Issued 500 shares of preferred stock at $110 per   share.

 

22

Issued 4,000 shares of common stock at $23 per   share.

 

Apr.

2

Reissued 700 shares of treasury stock at $24 per   share.

 

May

14

Declared a 10% stock dividend on the outstanding   common stock, payable on June 29. The common stock is currently selling for   $25 per share.

 

Jun.

4

Declared the semiannual cash dividend on the   outstanding preferred stock, payable on July 5.

 

29

Issued the stock dividend declared on May 14.

 

Jul.

5

Paid the cash dividend declared on June 4.

 

20

Split the common stock 2-for-1 and reduced the   par value to $2.50 per share.

 

Aug.

3

Declared a property dividend, payable to common   shareholders on September 14. The dividend consists of an available-for-sale   investment in 50 Drot Company bonds. The bonds had been acquired for $45,000,   but have a carrying value of $30,000. The bonds are currently selling for   $20,000.

 

Sep.

14

Paid the property dividend declared on August 3.

 

Dec.

3

Declared the semiannual cash dividend on the   outstanding preferred stock and a $0.90 per share annual dividend on the   outstanding common stock.

Required:

 

1.

Prepare   journal entries to record the preceding transactions.

 

2.

Prepare   the December 31, 2016, shareholders’ equity section (assume that 2016 net   income was $270,000).

X

Accounting Question

Accounting Question

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Top of Form

“Cash Flows”  Please respond to the following:

E12-4 The current sections of Sunn Inc.’s balance sheets at December 31, 2016 and 2017, are presented here. Sunn’s net income for 2017 was $153,000. Depreciation expense was $27,000.

  2017 2016
Current assets    
Cash $105,000 $ 99,000
Accounts receivable 80,000 89,000
Inventory 168,000 172,000
Prepaid expenses 27,000 22,000
Total current assets $380,000 $382,000
Current liabilities    
Accrued expenses payable $ 15,000 $ 5,000
Accounts payable 85,000 92,000
Total current liabilities $100,000 $ 97,000

Instructions

Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2017, using the indirect method. Suggest a meaning for this number.

Prepare statement of cash flows—indirect method.

Check Figure for E12-4     Net cash provided $191,000.

ACCOUNTING QUESTION

ACCOUNTING QUESTION

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1.  The entry to record the requisition of supplies from the storeroom would include __________.

A. debit to Raw Materials; credit to Work-in-Process

B. debit to Overhead-Applied; credit to Overhead-Control

C. debit to Work-in-Process; credit to Overhead-Control

D. debit to Overhead-Control; credit to Supplies Inventory

 

2.  Sensitivity analysis is part of __________.

A. income statement analysis

B. Gross profit analysis

C. cost analysis

D. cost-volume-profit analysis

 

3.  ABC Restaurant’s revenue budget reflects the following information for February:

 

Food sales$260,000

Beverage and liquor sales$140,000

Total sales$300,000

 

ABC expects revenue to increase by 5% during both March and April. What is the budgeted amount of food sales revenue for April?

 

A. $286,650

B. $272,650

C. $288,250

D. $292,350

 

4.  Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory is $85,000, and cost of goods manufactured is $600,000.

 

A. $615,000

B. $445,000

C. $685,000

D. $585,000

 

5. An element of sensitivity analysis includes __________.

A. unidimensional changes

B. a sole focus on profit

C. simultaneous changes

D. a financial accounting approach

 

6. ABC Restaurant’s revenue budget reflects the following information for February:

 

Food sales:$260,000

Beverage and liquor sales:$140,000

Total sales$300,000

 

ABC expects revenue to increase by 8% during both March and April. What is the budgeted amount of total sales revenue for April?

 

A. $350,000

B. $345,580

C. $353,620

D. $349,920

 

7.  What is the journal entry to record issuing raw materials from the storeroom?

A. debit Raw Materials Inventory; credit Work-in-Process

B. debit Overhead-Control; credit Work-in-Process

C. debit Work-in-Process; credit Overhead-Control

D. debit Work-in-Process; credit Raw Materials Inventory

 

8.  A budget enables managers to __________.

 

A. focus solely on production

B. adopt lax standards

C. abrogate responsibility for financial goals

D. achieve company objectives

 

9. Manufacturing overhead includes all manufacturing costs __________.

 

A. including raw materials

B. including overhead

C. excluding raw materials and direct labor

D. none of the above

 

10. What is the journal entry to record the direct labor summarized on the labor distribution report?

 

A. debit Finished Goods; credit Payroll

B. debit Work-in-Process; credit Payroll

C. debit Payroll; credit Direct Labor

D. debit Payroll; credit Cash

 

11. During the week ending on November 30, total factory payroll incurred was $6,000. Of this total, 80% was for direct labor. The entry to record the payroll distribution would include __________.

 

A. debit Work-in-Process Inventory $4,800 and Overhead-Control $1,200

B. debit Work-in-Process Inventory $6,000

C. debit Work-in-Process Inventory $4,800 and Overhead-Applied $1,200

D. debit Work-in-Process Inventory $4,800 and Indirect Labor Expense $1,200

 

12. Which of the following is part of a firm’s master budget?

A. pro forma budget

B. inventory purchases budget

C. operating budget

D. schedule of cash receipts budget

 

13. In a manufacturing company, the purchase of materials on account should be recorded as follows __________.

 

A.

Raw Material Inventory

Accounts Payable

 

B.

Work-in-Process Inventory

Accounts Payable

 

C.

Finished Goods Inventory

Accounts Payable

 

D.

Accounts Payable

Raw Materials Inventory

 

14.  The budget that is developed first when preparing the master budget is the __________ budget.

 

A. cash receipts

B. inventory purchases

C. sales

D. administrative expense

 

15.  Candyland completed the manufacturing process. The entry to transfer the product to finished goods is __________.

 

A.

Raw Materials Inventory

Finished Goods Inventory

 

B.

Finished Goods Inventory

Cost of Goods Sold

 

C.

Finished Goods Inventory

Work-in-Process Inventory

 

D.

Finished Goods Inventory

Raw Materials Inventory

 

16. Journal entries crediting Payroll and debiting Work-in-Process Inventory are made for __________.

 

A. administrative salaries

B. hourly manufacturing labor

C. foremen’s salaries

D. raw materials

 

17. Direct labor includes the wages of __________.

 

A. an hourly worker producing the product

B. the shop foreman

C. maintenance workers

D. administrators

 

18. Omega.com sold 25 jet skis for $7,000 which cost $5,000. The entry to record the sale would include __________.

 

A. credit to Finished Goods Inventory for $5,000

B. credit to Sales for $7,000

C. debit to Cost of Goods Sold for $5,000

D. all of the above

 

19.  The entry for indirect materials (such as glue, etc.. requisitioned for use in production is __________.

 

A.

Raw Materials Inventory

Work-in-Process Inventory

 

B.

Work-in-Process Inventory

Accounts Payable

 

C.

Work-in-Process Inventory

Raw Materials Inventory

 

D. None of the above

 

20. Raw material inventory appears on the __________.

 

A. balance sheet

B. income statement

C. cost of goods manufactured statement

D. both A and C

Accounting Question

Accounting Question

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Question 1

The following information is available for Oakland Company:

20142013

Accounts receivable$  360,000$  400,000

Inventory                 340,000400,000

Net credit sales               2,470,0001,400,000

Cost of goods sold1,850,0001,060,000

Net income                300,000170,000

 

The inventory turnover ratio for 2014 is

 

5.0 times.

5.4 times.

4.6 times.

6.7 times.

 

Question 2

Swiss Clothing Store had a balance in the Accounts Receivable account of $920,000 at the beginning of the year and a balance of $980,000 at the end of the year. Net credit sales during the year amounted to $6,650,000. The average collection period of the receivables in terms of days was

 

50.7 days.

52.1 days.

53.7 days.

30 days.

 

Question 3

Assume the following sales data for a company:

 

2014$1,050,000

2013950,000

2012800,000

2011650,000

 

If 2011 is the base year, what is the percentage increase in sales from 2011 to 2013?

 

100%

61.5%

46.2%

68.4%

 

Question 4

The current assets of Myers Company are $250,000. The current liabilities are $100,000. The current ratio expressed as a proportion is

 

2.5 : 1

.25 : 1

250%.

$250,000 ÷ $100,000.

 

Question 5

Nord Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $70,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on the amount of Nord Company’s working capital?

 

No effect

$70,000 decrease

$140,000 increase

$70,000 increase

 

Question 6

If a company has an acid-test ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio?

 

Short-term Borrowing   Collection of Receivable

 

Increase                  Increase

Decrease               Decrease

Decrease               No effect

Increase               No effect

 

Question 7

If an item meets one (but not both) of the criteria for an extraordinary item, it

 

is reported as an “other revenue or gain” or “other expense and loss,” net of tax.

only needs to be disclosed in the footnotes of the financial statements.

is reported at its gross amount as an “other revenue or gain” or “other expense or loss.”

may be treated as sales revenue (if it is a gain) and as an operating expense (if it is a loss).

 

Question 8

In ratio analysis, the ratios are never expressed as a

 

percentage.

simple proportion.

negative figure.

rate.

 

Question 9

An aircraft company would most likely have

 

low profit margin.

a high inventory turnover.

high volume.

a low inventory turnover.

 

Question 10

The disposal of a significant component of a business is called

 

a change in accounting principle.

an extraordinary item.

discontinued operations.

an other expense.

Accounting Question

Accounting Question

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Vanessa owns a consulting business that has always been reported as a sole proprietorship on her tax return. Assume that on February 19, 2016 Vanessa purchases a new computer for $5,000 that will be used solely for her business. Using the depreciation table below compute her depreciation expense for 2016. Assume no bonus depreciation and no Section 179 depreciation.

Cost of asset
Depreciation % from Table
Months deemed owned in 2016
Regular MACRS Depreciation for 2016

Assume that Vanessa sells this computer on August 3, 2018. What would MACRS depreciation be for the computer for 2018?

MACRS Depreciation

MACRS Accelerated Depreciation Table

Recovery Year Property Class
  3-year 5-year 7-year
1 33.33% 20.00% 14.29%
2 44.45 32.00 24.49
3 14.81 19.20 17.49
4 7.41 11.52 12.49
5   11.52 8.93
6   5.76 8.92
7     8.93
8     4.46

 

 

Cola, Inc. purchased all of its personalty (equipment) in the fourth quarter of its tax year. Provide the IRC Section and subsection that indicates the convention that applies when computing MACRS depreciation in this situation.

Enter your response in the answer fields below. Guidance on correctly structuring your response appears above and below the answer fields.

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Examples of correctly formatted IRC responses are IRC§1(a),IRC§12(a),IRC§12A(a),IRC§12AA(a),IRC§123(a),
IRC§123A(a),IRC§1234(a),IRC§1234A(a), and IRC§1234A-5(a)