Spacely Sprockets, Inc. invested $4,996,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 31,800 machine hours and a residual value of $496,000. In its first year in operation the equipment was used for 2,130 hours and an additional 2,990 hours in its second year of usage. The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below. All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $34,491,000 $36,106,000 COGS $22,202,000 $22,388,000 Gross Profit $12,289,000 $13,718,000 Operating Expenses (before adding in Depreciation) $7,663,000 $8,113,000 Income from Operations $4,626,000 $5,605,000 Income Tax Expense (at 30%) $1,387,800 $1,681,500 Net Income $3,238,200 $3,923,500 Round all items to the nearest whole dollar and use rounded values for all future calculations.
Spacely Sprockets, Inc. invested $4,996,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 31,800 machine hours and a residual value of $496,000. In its first year in operation the equipment was used for 2,130 hours and an additional 2,990 hours in its second year of usage. The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below. All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $34,491,000 $36,106,000 COGS $22,202,000 $22,388,000 Gross Profit $12,289,000 $13,718,000 Operating Expenses (before adding in Depreciation) $7,663,000 $8,113,000 Income from Operations $4,626,000 $5,605,000 Income Tax Expense (at 30%) $1,387,800 $1,681,500 Net Income $3,238,200 $3,923,500 Round all items to the nearest whole dollar and use rounded values for all future calculations.
Chapter4: The Adjustment Process
Section: Chapter Questions
Problem 7PB: Using the following information, A. Make the December 31 adjusting journal entry for depreciation....
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Spacely Sprockets, Inc. invested $4,996,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 31,800 machine hours and a residual value of $496,000. In its first year in operation the equipment was used for 2,130 hours and an additional 2,990 hours in its second year of usage.
The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below.
All items rounded to nearest whole dollar.
Spacely Sprockets, Inc. | Year 1 | Year 2 |
---|---|---|
Net Sales | $34,491,000 | $36,106,000 |
COGS | $22,202,000 | $22,388,000 |
Gross Profit | $12,289,000 | $13,718,000 |
Operating Expenses (before adding in |
$7,663,000 | $8,113,000 |
Income from Operations | $4,626,000 | $5,605,000 |
Income Tax Expense (at 30%) | $1,387,800 | $1,681,500 |
Net Income | $3,238,200 | $3,923,500 |
Round all items to the nearest whole dollar and use rounded values for all future calculations.
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