ACC 305 Final Exam Part 2
Quigley Co. bought a machine on January 1, 2013 for $1,399,500. It had a $119,500 estimated residual value and a 8-year life. An expense account was debited on the purchase date. Quigley uses straight-line depreciation. This was discovered in 2015.
The condensed financial statements of Marks Company for the years 2014-2015 are presented below:
Hughey Co. as lessee records a capital lease of machinery on January 1, 2014. The seven annual lease payments of $700,300 are made at the end of each year. The present value of the lease payments at 10% is $3,410,800. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).
Milner Co. sold a machine that cost $74,000 and had a book value of $33,000 for $51,000. Data from Milner's comparative balance sheets are: