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Question II: Fedex Express acquired a delivery truck on January 1, 2009 for $48,000. Its firmmanager estimated that the truck would have a useful life of 6 years and a $6,000 salvage value.Fedex Express uses the straight-line depreciation method. On July 1, 2013 Fedex Express soldthe truck for $14,000. Give the Journal Entries that Fedex Express manager would make on July1, 2013 to recognize depreciation for 2013. Also, provide the Journal Entries for the sale of thetruck.
Question III: Southwest purchased a Boeing 747 aircraft for $70 million in cash, which wasborrowed from Bank of America with $5 million financing fees. In addition, Southwest paid$200,000 to have the plane delivered and $300,000 to prepare the new plane for use (both in cash).The aircraft is depreciated using the straight-line method with a useful life of 20 years and anestimated residual value of $5 million. In the sixth year, Southwest changed the estimated usefullife to 25 years and lowered the residual value to $1.5 million. Calculate depreciation expense forthe sixth, fifteenth, and twenty-fifth year using the straight-line method. What is the journal entryfor the sixth year? Finally, does the change in the depreciation estimates affect net income for thesixth year? If yes, assume that net income for the fifth year and the sixth year is the same andexplain how the net income for the sixth is affected (compared to that for the fifth year)?
Michaels Company segments its income statement into its East and West Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $600,000, 60%, and $36,000, respectively. The West Division’s contribution margin an..
Elemarketers receive $15 commission on all new customers they sign up for phone service through Birch Phones. Each telemarketer works 40 hours.Compute the gross pay for each of the following outbound sales representatives.
Danielson Inc., sells two types of caviar. Both are widely recognized as quality products throughout its worldwide distribution system, but from time to time the actual mix of the product shifts as tastes change. If Danielson uses the package approac..
Explain what is meant by the LIFO reserve account. How does LIFO subtract inflation from inventory costs? Explain how the cash flow of $174,400 in this example was computed. Explain why this amount may not be correct.
Suppose I purchase a house for $300,000. To purchase it, I take out a 20 year loan worth $250,000 at an annual interest rate of 5.2% compounded quarterly. How much should my quarterly loan payments be in order to pay off the loan after exactly 20 yea..
Compute the ending balance in the work-in-process account. Prepare the journal entries reflecting the completion and sale on account of Job 64. The selling price is 160 percent of cost.
The following summarizes the terms of a lease entered into between Dove Company (lessor) and Hawk Company (lessee) entered into on January 1, 2016: Explain the nature of this lease to Hawk. Prepare all of the necessary accounting entries in 2016 for..
spruce dairy company manufactures three products - skim milk whole milk and cream - in two production departments
A subsequent event refers to an event that occurs after the date of the audited balance sheet but prior to the date of the auditors' report. Subsequent events can be divided into two broad categories. What type of subsequent event is the death of the..
The Supplies account had a beginning balance of $1,787. Supplies purchased during the period totalled $4,756. At the end of the period before adjustment, $558 of supplies were on hand. Prepare the adjusting entry for supplies.
Compute the total amount of depletion for 2014. Compute the amount that is charged as an expense for the cost of the minerals sold.
Prepare a multiple-step income statement for Jackrabbit Inc. from the following single-step statement. Gain on sale of equipment, Interest income and General and admin expenses.
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