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1)Presented below is information related to Waterway Manufacturing Corporation
1)Presented below is information related to Waterway Manufacturing Corporation. Asset Estimated Life (in years) 10 A Estimated Salvage $6.100 5,200 4.100 1.500 Cost $53.800 32.200 36,500 19.000 B 2 ? 9 D 7 E 24.000 3.300 6 Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (Round answer to 2 decimal place, e.g. 4.83%) Composite rate eTextbook and Media
Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (Round answer to 2 decimal place, e.g. 4.83%) Composite rate eTextbook and Media List of Accounts Prepare the adjusting entry necessary at the end of the year to record depreciation for the year. (If no entry is required, select "No entry"for the account titles and enter Ofor the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Plant Assets related account.) Account Titles and Explanation Debit Credit e Textbook and Media
2)The amount a company expects to collect from customers appears on the O A. balance sheet in the current assets section. O B. statement of cash flows. O C. income statement in the expenses section. O D. balance sheet in the shareholders' equity section.
3)
Correct classification distinguishing current and long-term liabilities is important as it affects the evaluation of a company’s liquidity.
- Current liabilities – debts and obligations a company expects to satisfy within one year or within its normal operating cycle, whichever is shorter.
- Long-term liabilities - debts and obligations a company expects to satisfy beyond one year or beyond its normal operating cycle, whichever is shorter.
A. True
B. False
Expert Solution
1)
| Asset | Cost | Salvage Value | Depreciable Value | Estimated Life | Annual Depreciation |
| a | b | c=a-b | d | e=c/d | |
| A | 53,800 | 6,100 | 47,700 | 10 | 4,770 |
| B | 32,200 | 5,200 | 27,000 | 9 | 3,000 |
| C | 36,500 | 4,100 | 32,400 | 9 | 3,600 |
| D | 19,000 | 1,500 | 17,500 | 7 | 2,500 |
| E | 24,000 | 3,300 | 20,700 | 6 | 3,450 |
| Total | $ 165,500.00 | $ 17,320.00 |
Composite Depreciation Rate = Total Annual Depreciation/ total cost
= 17,320 / 165,500 = 10.47%
| Account Title | Debit | Credit |
| Depreciation Expenses | $ 17,320.00 | |
| Accumulated Depreciation | $ 17,320.00 |
2)
| The amount a company expects to collect from customer appears on the balance sheet in the current assets section. |
| The amount a company expects to collect from customer is called Accounts Receivable which appears on the balance sheet in the current assets section. |
| Option A is correct |
3)
Answer: B. False
EXPLANATION
Current liabilities
- It is expected to settled within normal operating cycle (or)
- It is due to be settled within 12 months from Reporting date (or)
- It is held for the purpose of trading (or)
- Entity does not have unconditional right to defer settlement of Liability for at least 12 months after Reporting date
If above conditions not satisfied than it is a non current liabilities or long term Liability
In question given condition 1 and 2 whichever is shorter that is wrong
Actually conditions are individual so conditions 1 and 2 whichever is longer
Conditions 1 and 2 Whichever is longer both cases current liabilities and long term Liabilities
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