Reference no: EM132907219
Questions -
Q1. The Blue Hat Co. purchased new equipment at a total cost of $202,600. The equipment will be used in their new factory for an estimated 12 years. It is estimated that the equipment will only be worth $7,200 in 12 years. The Blue Hat Co. must calculate the depreciation for this new equipment for its year ended December 31. The new equipment was purchased and put in use on May 1, 2019.
A. Calculate the depreciation expense for the Blue Hat Co. for this new equipment for year ended December 31, 2019
B. Calculate the depreciation expense for the Blue Hat Co. for this new equipment for year ended December 31, 2020
Q2. Cheap Buyers Inc. sells its products to its customers using the shipping terms, Free On Board (FOB) Destination. On December 31, 2020, it ships $14,000 for its products to Expensive Buyer. The products arrive at Expensive Buyer on January 3, 2021.
(a) When can Cheap Buyers record the $14,000 as revenue?
(b) When can Expensive Buyer record the $14,000 as Inventory?
(c) Which Company must pay the $600 to the trucking company?
(d) Which Company should pay for the insurance while it is in the truck?
Q3. What management information is better understood using the Aging of Accounts Receivable method that is not as easily understood by the Percentage of Sales method or the Percentage of Accounts Receivable method?