The accumulated truck depreciation account, previously adjusted on January 1, 2018 and recorded in the general ledger, had a balance of $30,200 at that time (depreciation on the four trucks from the respective purchase dates, based on a 5-year lifespan, no residual value). No charges had been laid against the account prior to January 1, 2018. The transactions recorded in the general ledger between January 1, 2018 and December 31, 2021 are as follows. Sometimes compensation plans include bonuses designed to incentivize employees. The difficulty that a bonus can cause accountants is not an accounting problem, but a mathematical problem. The complication is that the bonus formula sometimes states that the bonus calculation is partly based on the bonus itself. This happens whenever the bonus is a percentage of income, since expenses are components of income and the bonus is an expense. Regalia Fashions has an incentive compensation plan whereby a division manager receives a bonus equal to 10% of the division`s net profit. The division`s income in 2016 before the premium and income tax was $150,000. The tax rate is 30%. Required: 1.
Express the bonus formula as one or more algebraic equations. 2. Use these formulas to calculate the bonus amount. 3. Prepare the adjustment entry to enter the bonus compensation. 4. Bonus agreements come in many forms. Suppose the bonus indicates that the bonus is 10% of the income of the division before tax, but after the bonus itself. Calculate the bonus amount.
Shortly after 31. In December 2021, an Ichiro Manufacturing Company semi-trailer depreciation plan was requested by your auditor, showing additions, withdrawals, depreciation and other data affecting the company`s revenues during the 4-year period from 2018 to 2021. The following data were collected. A) Expenditures increase equity, so the normal balance of an expense account is a balance. Would you rather have a savings account that pays 5% interest semi-annually, or one that pays 5% interest per day? Explain. Truck Balance Account, January 1, 2018No. 1 Truck Purchased January 1, 2015, Cost 18,000 $Camion No. 2 Purchased July 1, 2015, Cost 22,000No. 3 Truck Purchased January 1, 2017, Cost20,000No. 4 Truck Purchased July 1, 2017, Cost 24,000 ̅Balance, January 1 201894,000 ̅begin{array}{lrr} text{Truck Balance Account, January 1, 2018} hspace{5pt}text{Truck No. 1 purchased January 1, 2015, cost}&&$hspace{5pt}18,000 hspace{5pt}text{Truck No. 2 purchased July 1, 2015, cost}&&22,000 hspace{5pt}text{Truck No.
3 purchased January 1, 2017, cost}&&20,000 hspace{5pt}text{Truck No. 4 purchased July 1, 2017, coût}&&underline{hspace{10pt}24,000} hspace{5pt}text{Balance, Jan. 1, 2018}&&underline{underline{$hspace{5pt}94,000}} end{array} Truck balance account, January 1, 2018No. 1 truck purchased January 1, 2015, costNo. 2 truck purchased July 1, 2015, costNo. 3 truck purchased January 1, 2017, costNo. 4 truck purchased July 1, 2017, costSale, January 1, 2018181818 0002 00020 00024,000 $94,000 b. Prepare a composite journal entry as of December 31, 2021 for the truck account adjustment to reflect the correct balances that come out of your calendar, assuming the books have not been closed for 2021.
Year-end straight-line depreciation and amortization records were made as follows: $21,000 in 2018; 2019, $22,500; 2020, $25,050; and 2021, $30,400. Which of the following conditions applies to expenses? One. For each of the 4 years, separately calculate the increase or decrease in net profit resulting from the company`s errors in determining or recording depreciation or recording transactions affecting trucks, ignoring tax considerations.