Strict corporation a essay

Individuel Example

After the controller of Stern Organization had discovered the changes in accounts receivable and the allocation for skeptical accounts over 10 years ago, a similar evaluation was made of property, plant, and equipment and accrued depreciation accounts. Again the controller reviewed the December 31, 97, balance sheet [see Exhibit 1 of Stern Firm (A)]. Also reviewed had been the following organization transactions that have been found being applicable to these accounts: 1 ) On January 2, 98, one of the manufacturing plant machines was sold for the book worth, $3, 866. This equipment was recorded within the books for $31, 233 with built up depreciation of, 367.

installment payments on your Tools were carried on the books by cost, with the end of each and every year an actual inventory was taken to know what tools still remained.

The account was written down to the magnitude of the reduction in tools because ascertained by the year-end products on hand. At the end of 1998, it was determined that there was a decline in the tool inventory amounting to $7, 850. a few. On Drive 1, 1998, the company people paid $2, 336 cash a vehicle that was written on the ebooks at a cost of $8, 354 together an gathered depreciation of $5, one hundred and eighty, giving a net book value of $3, 174 as of January 1, 1998.

In this and other cases of the sale of long-lived assets in the past year, the accumulated depreciation and depreciation charge items had been both increased by a quantity that mirrored the depreciation chargeable for the months over 10 years ago in which the property was held before the sale, at rates listed in 7 listed below. 4. The patent listed on the balance sheet was purchased by Stern Corporation on January 31, 1987, for $168, 750.

This patent had been granted in December 23, 1985. The price tag on the obvious was to become written off as a cost over the remainder of its legal lifestyle. (The legal life of the patent is 17 years from the particular date granted. ) 5. In July you, 1998, a typewriter that had cost $1, 027 and had recently been fully lowered on 12 , 31, 97, was sold for $75. 6. On August 1, 98, the company marketed a workplace for $80. This furniture piece was recorded within the books by a cost of $490 with an accrued depreciation of $395 since January one particular, 1998. several. Depreciation was calculated in the following prices:

Buildings¦¦¦¦¦¦¦¦¦¦ | 2% |

Stock machinery¦¦¦¦¦.. | 10* |

Furniture and fixtures¦¦¦¦ | twelve |

Automotive equipment¦¦¦.. | 20 |

Office machines¦¦¦¦¦¦¦ | 10 |

8. As part of the factory machinery cost of $3, 425, 585 was a equipment costing $85, 000 that were fully depreciated on 12 , 31, 1997, and that was still in use. Job

1 . In a method similar to that used in Strict Corporation (A), analyze the effect of each of such transactions within the property, herb, and products accounts, gathered depreciation, and any other accounts may be included; prepare diary entries for these transactions. Strict Corporation (B) Overview Concerns:

* In Dec 23, 2010, the business reviewed particular transactions applicable to accounts receivable that happen to be as used: * Sales during 2010 amounted to $9, 965, 575

* Payments received during 2010 ” $9, 685, 420

* In the past year A/C rec. totaling $26, 854 had been w/o

* Two accounts had been w/o last season were collected in 2010

* One account for 2108 was paid in full

* Part payment of 1566 was performed and the unique amount was 2486 * Allowance for bad debt to was adjusted as 3% from the balance in account receivable at the end from the year

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