BUSINESS COLLEGE

On July 23 of the current year, Dakota Mining Co. pays $6,165,600 for land estimated to contain 8,808,000 tons of recoverable ore. It installs machinery costing $1,849,680 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 488,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined.Required:
Prepare entries to record the following:_______.
(a)To record the purchase of the land.
(b)To record the cost and installation of machinery.
(c) To record the first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.
(d)To record the first five months' depreciation on the machinery.

Answers

Answer 1
Answer:

Answer:

a) July 23, 202x, purchase of land parcel (for mining purposes)

Dr Land and ore deposits 6,165,600

    Cr Cash 6,165,600

b) July 25, 202x, purchase and installation of mining machinery

Dr Machinery 1,849,680

    Cr Cash 1,849,680

c) December 31, 202x, depleting expense of ore deposits

Dr Depleting expense 341,917

    Cr Accumulated depletion: land and ore deposits 341,917

depleting expense = ($6,165,600 / 8,808,000 tons) x 488,500 tons = $341,917

d) December 31, 202x, depreciation expense of machinery

Dr Depreciation expense 102,585

    Cr Accumulated depreciation: machinery 102,585

depreciation expense = ($1,849,680 / 8,808,000 tons) x 488,500 tons = $102,585

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Kim received a one-third profits and capital interest in Bright Line, LLC, in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $30,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: sales-$150,000, cost of goods sold-$90,000, depreciation expense-$45,000, long-term capital gains -$15,000, qualified dividends-$6,000, and municipal bond interest-$3,000. How much ordinary business income (loss) will Bright Line allocate to Kim on her Schedule K-1 for X4? a. ($15,000). b. $6,000. c. $9,000. d. $9,000. e. $15,000. f. None of the choices will be reported as ordinary business income (loss) on Schedule K-1.

A loan of $100,000 is taken out which requires an annual interest payment of 6% of the borrowed amount of money (in market dollars). No principal payments are made, only interest is paid. Inflation is 3.1% per year. what will be the value of interest payment at the end of fifth year in real dollars?A. $5,930 B. $6,000 C. $5,150. D. $6.989

Answers

Answer:

C. $5,150

Explanation:

Calculation for what will be the value of interest payment at the end of fifth year in real dollars

First step is to calculate the Interest amount per year

Interest amount per year = 100,000*6%

Interest amount per year = $6,000

Now let calculate the value of interest payment at the end of fifth year in real dollars

Value of interest payment in 5th year in real dollars = 6,000/(1+3.1%)^5

Value of interest payment in 5th year in real dollars= 6,000/1.164913

Value of interest payment in 5th year in real dollars= $5,150

Therefore the Value of interest payment in 5th year in real dollars will be $5,150

Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PB0 report from the actuary. The following information was included in the report: ending PBO, $110,000 benefits paid to retirees. $10,000, interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO? A) $100,000
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C) $90,000.
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Answers

Answer:

C) $90,000

Explanation:

Beginning PBO = Interest cost/Discount rate =

Beginning PBO = $7,200/8%

Beginning PBO = $90,000

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Answers

Answer:

Check the explanation

Explanation:

  • The foremost thing is to first consider steady states. The Sluggish population growth rate swings in the line representing population growth and depreciation to the downward trend.
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The relevant production range for Challenger Trailers, Inc. is between 120,000 units and 190,000 units per month. If the company produces beyond 190,000 units per month:__________. A. the fixed costs and the variable cost per unit will not change B. the fixed costs may change, but the variable cost per unit will remain the same C. the fixed costs will remain the same, but the variable cost per unit may change D. both the fixed costs and the variable cost per unit may change

Answers

Answer:  D. both the fixed costs and the variable cost per unit may change

Explanation:

It is said that Fixed costs do not change regardless of production level but this is not entirely true. Fixed costs usually do not change for a production range but if the range is passed, the fixed costs might then increase and a new fixed cost for the new relevant range will be charged.

Variable costs are variable because they change with production so if the company is producing more units, they will be incurring more variable costs.

In conclusion therefore, if the company produces more units than its relevant production range, it risks both fixed and variable costs changing.

The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Department A and on machine-hours in Department B. At the beginning of the year, the Corporation made the following estimates: Department A Department B Direct labor cost $ 60,000 $ 40,000 Manufacturing overhead $ 90,000 $ 45,000 Direct labor-hours 6,000 9,000 Machine-hours 2,000 15,000 What predetermined overhead rates would be used in Department A and Department B, respectively?

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Department A:

Direct labor cost= $60,000

Manufacturing overhead= $90,000

Department B:

Manufacturing overhead= $45,000

Machine-hours= 2,000

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Department A:

Predetermined manufacturing overhead rate= 90,000/60,000

Predetermined manufacturing overhead rate= $1.5 per direct labor dollar

Department B:

Predetermined manufacturing overhead rate= 45,000/2,000= $22.4 per machine-hour

Assume that you are the owner of Campus Connection, which specializes in items that interest students. At the end of January of the current year, you find (for January only) this information: a. Sales, per the cash register tapes, of $112,000, plus one sale on credit (a special situation) of $3,100.

b. With the help of a friend (who majored in accounting), you determine that all of the goods sold during January cost $48,000 to purchase.

c. During the month, according to the checkbook, you paid $42,000 for salaries, rent, supplies, advertising, and other expenses; however, you have not yet paid the $1,000 monthly utilities for January on the store and fixtures.

Required:

On the basis of the data given (disregard income taxes), what was the amount of net income for January?. (Hint: A convenient form to use has the following major side captions: Revenue from Sales, Expenses, and the difference—Net Income.)

Answers

Answer:

The amount of net income for January was $24,100

Explanation:

Revenues from sales $115,100 (for this analysis is not important if the sales were in cash or on credit)

-

Cost of goods sold $48,000

------------------------------------

Gross profit $67,100

-

Salaries, rent, supplies, advertising, other expenses and monthly utilities (it is not important for this analysis if all the exenses were paid) -$43,000

-----------------------------------

Net income $24,100

Final answer:

The net income for Campus Connection for the month of January is calculated by subtracting the total expenses ($91,000) from the total sales ($115,100), which equals $24,100.

Explanation:

To calculate the net income for January for Campus Connection, we need to consider the revenues and expenses for the month.

First, let's calculate the total revenues. Cash sales amount to $112,000 and the credit sales to $3,100. Therefore, the total revenues for the month of January equal $115,100.

Next, we calculate the total expenses. We know from the data given that the cost of goods sold equals $48,000. Also, the other expenses such as salaries, rents, supplies, and advertising total to $42,000. However, the utilities for January have not yet been paid. This adds an additional $1,000 to the expenses. So the total expenses for January are $48,000 (cost of goods sold) + $42,000 (other expenses) + $1,000 (unpaid utilities) = $91,000.

The net income is calculated by subtracting the total expenses from total revenues; thus $115,100 (sales) - $91,000 (expenses) = $24,100. Therefore, the net income for Campus Connection for January is $24,100.

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