Rhino Corporation is a manufacturer of automobile parts. Its capital assets include specialized equipmentthat is being used in the finishing stage of its manufacturing process.The equipment was purchased in 2020 and is being depreciated using the units of production method. ByDecember 31, 2021, the book (carrying) value was $430,000 (after depreciation expense had beenrecorded). However, at that time, Rhino became aware of new technology that would make the equipmentobsolete within the next five years. An appraisal puts the equipment's future undiscounted net cash flows at$390,000 and its fair value at $300,000. While considering its options for the eventual replacement, Rhinowill continue using the equipment, but will change to straight-line depreciation.InstructionsAssuming Rhino is a private Canadian corporation apply ASPE,a) Prepare the journal entry, if any, to record the impairment loss at December 31, 2021.(4 marks)b) Prepare the journal entries to record 2022 and 2023 depreciation. (4 marks)

a) Rhino Corporation needs to record an impairment loss for the equipment as of December 31, 2021.…

Answered: Rhino Corporation is a manufacturer of…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 66P: At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been...

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Kingbird Assets Inc., a publicly listed company, has a building with an initial cost of $406,000. At December 31, 2020, the date of revaluation, accumulated depreciation amounted to $99,000. The fair value of the building, by comparing it with transactions involving similar assets, is assessed to be $337,700. On January 5, 2021, Kingbird sold the building for $332,700 cash. Your answer is partially correct. Prepare the journal entries to record the sale of the building after having used the cost model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 5 Accumulated Depreciation - Buildings 99000 Cash 332700 Gain on Disposal of Building Buildings
Moderna Ltd. owned several manufacturing facilities to produce vaccines. On September 15 2020, Moderna decided to sell one of its manufacturing buildings. The building had cost $4,000,000 when originally purchased 8 years ago. The building had been depreciated using the straight-line method with no residual value. Moderna estimated that the building had a 25-year life when purchased. Assume 8 years of depreciation has already been recorded in the accounts to the date of disposal by Moderna and the building was sold for $2,200,000 cash. By how much is depreciation expense debited each year until disposition? What is the balance in the accumulated depreciation account of the building on September 15, 2020?…
Moderna Ltd. owned several manufacturing facilities to produce vaccines. On September 15 2020, Moderna decided to sell one of its manufacturing buildings. The building had cost $4,000,000 when originally purchased 8 years ago. The building had been depreciated using the straight-line method with no residual value. Moderna estimated that the building had a 25-year life when purchased. Assume 8 years of depreciation has already been recorded in the accounts to the date of disposal by Moderna and the building was sold for $2,200,000 cash. By how much is depreciation expense debited each year until disposition? What is the balance in the accumulated depreciation account of the building on September 15, 2020?…
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On January 1, 2021, Larry Company purchased a patent for an immune system boosting drink called Infra for P800,000. The patent is determined to have an indefinite life. During 2022, a competitor introduced a new product that is in direct competition with Infra; hence, the patent was tested for possible impairment. Data gathered suggests that the patent still has an indefinite life, but the cash flows to be generated from the asset have been reduced to either P40,000 per year (with 50% probability) or to P80,000 per year (with 50% probability). The appropriate risk-free interest rate is 8% and the risk-adjusted interest rate is 10%. What is the impairment loss recognized in the accounts for the year ended December 31, 2022? P200,000 P400,000 P800,000 P0
Oriole Company purchased land on February 1, 2020, at a cost of $2,102,000. It estimated that a total of 53,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $191,000. It believes it will be able to sell the property afterwards for $274,000. It incurred developmental costs of $525,000 before it was able to do any mining. In 2020, resources removed totaled 10,600 tons. The company sold 5,300 tons. Compute the following information for 2020. (a) Per unit mineral cost $ /ton (b) Total material cost of December 31, 2020, inventory $ +A (c) Total material cost in cost of goods sold at December 31, 2020 $
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George Young Industries (GYI) acquired industrial robots at the beginning of 2018 and added them to the company’s assembly process. During 2021, management became aware that the $2.8 million cost of the equipment was inadvertently recorded as repair expense on GYI’s books and on its income tax return. The industrial robots have 10-year useful lives and no material salvage value. This class of equipment is depreciated by the straight-line method for financial reporting purposes and for tax purposes it is considered to be MACRS 7-year property. Cost deducted over 7 years by the modified accelerated recovery system as follows: Year MACRSDeductions 2018 $ 400,120 2019 685,720 2020 489,720 2021 349,720 2022 250,040 2023 249,760 2024 250,040 2025 124,880 Totals $ 2,800,000 The tax rate is 25% for all years involved.Required:1. & 3. Prepare any journal entry necessary as a direct result of the error described and the adjusting…
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