Question
Consider the amount and timing of the following transactions made by I.M. Farmer: December, 2021: Purchased, paid for and applied fertilizer for the 2022 grain
Consider the amount and timing of the following transactions made by I.M. Farmer:
December, 2021: Purchased, paid for and applied fertilizer for the 2022 grain crop. $5,000.
April, 2022: Purchased and paid for seed, chemicals, fuel, etc. $60,000.
November, 2022: Part of grain sold for $100,000. The rest placed in storage to sell in 2023, valued currently at $90,000.
December 31, 2022: Accrued interest, $500.
January 15, 2023: Paid accrued interest, $500.
May, 2023: Remaining 2022 grain sold. $105,000.
A) What is the 2022 profit under cash accounting? show work
B) What is the 2022 profit under accrual accounting? show work
2)
Use the information above... Useful Life Tractor Tillage implement Original Cost $75,000 $84,000 Salvage Value 0 $21,000 5 years 7 years Use the information above to fill in the annual depreciation for these machines in the table below, using both straight line (columns 1 and 2) and double declining balance (columns 3 and 4). Round depreciation values to the nearest dollar. For the tractor on DDB, be sure to switch to straight line (on the remaining value for the remaining life) as soon as you get more depreciation by making the switch. For the tillage implement on DDB, be careful not to depreciate below the salvage valueStep by Step Solution
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