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How Long Can Airplanes Fly? Airline A depreciates its airplanes over a 15-year period and estimates a salvage value of 10% of the cost of the plane. At the same time, Airline B depreciates identical airplanes over a 25-year period and provides for a 15% salvage value. These different assumptions resulted in markedly different operating […]

Depreciation Changes On January 1, 2006, McElroy Company purchased a building and equipment that have the following useful lives, salvage values, and costs. Building, 40-year estimated useful life, $50,000 salvage value, $1,200,000 cost Equipment, 12-year estimated useful life, $10,000 salvage value, $130,000 cost Depreciation Changes On January 1, 2006, The building has been depreciated under […]

Relaxing Recliner Chairs completed the following selected transa 2011 Dec 6 Received a $7,000, 90-day, 12% note on account from Dark Star Music. 31 Made an adjusting entry to accrue interest on the Dark Star Music note. 31 Made a closing entry for interest revenue. 2012 Mar 4 Collected the maturity value of the Dark […]

Reporting Cash on the Balance Sheet 1. 1. Indicate how each of the following items below should be reported using the following classifications: (a)cash,(b)restricted cash,(c)temporary investment,(d) receivable,(e) liability, or(f)office supplies. (1) Checking account at First Security $ (20) (2) Checking account at Second Security 350 (3) US savings bonds 650 (4) Payroll account 100 (5) […]

Reporting Net Sales with Credit Sales, Sales Discounts, and Cred The following transactions were selected from the records of OceanView Company: July 12 Sold merchandise to Customer R, who charged the $3,000 purchase on his Visa credit card. Visa charges OceanView a 2 percent credit card fee. Reporting Net Sales with Credit Sales, Sales Discounts, […]

The following were selected from among the transactions Bonita C Co., an appliance wholesale company: Jan. 20. Sold merchandise on account to Wilding Co., $30,750. The cost of merchandise sold was $18,600. Mar. 3. Accepted a 60-day, 8% note for $30,750 from Wilding Co. on account. May 2. Received from Wilding Co. the amount due […]

Refer to the financial statements of Abercrombie Required: Answer the following questions: 1. What method of computing net cash flow from operating activities did Abercrombie & Fitch use? What method of computing net cash flow from operating activities did Aeropostale use? Would you expect these to be the same? Why or why not? 2. Find […]

The following were selected from among the transactions Indigo Co., an appliance wholesale company: Jan. 13. Sold merchandise on account to Boylan Co., $32,000. The cost of merchandise sold was $19,200. Mar. 10. Accepted a 60-day, 6% note for $32,000 from Boylan Co. on account. May 9. Received from Boylan Co. the amount due on […]

Accounting for Receivables—Journal Entries The following transactions affecting the accounts receivable of Wonderland Corporation took place during the year ended January 31, 2008: Sales (cash and credit) $591,050 Cash received from credit customers, all of whom took advantage of the   discount feature of the corporation’s credit terms 4/10, n/30 303,800 Cash received from cash […]

Receivables and the Statement of Cash Flows The following selected information is provided The following selected information is provided for Lynez Company. All sales are credit sales and all receivables are trade receivables. Accounts receivable, January 1 net balance $125,000 Accounts receivable, December 31 net balance 165,000 Sales for the year 800,000 Uncollectible accounts written […]