Meltdown Incorporated Ticpotanil Mictiarty fiequired Drpexiation is caly clculatel and mosendal one per year, a gear ind, whish at aicet to wid. - Trodu itw colididring adlaye the eud ve Mosh 1. 2021. He evpecui to be ablo in gre 345.000 cuabr fer in and woold fidminer anowals yood towe if you pochided a jounal cory with woporiet colkulation. vifin wrond tivide the 4egrocuenin for the jear end. - thos cars io yee ave wimiod is inow why the lod anoos the fran a cante deyhpor suling if two doold twe is fire 570000 Whe do you dest - Deriag Yoso, Frod vorked hard wo atwat new buised lo brace in fived. Meltdown Incorporated Co-authored with Stephanie McGarry Laurentian Universiry Meltdown Incorporated (MI) recycles plastic and then sells it to manufacturing companies to produce toys, household items (such as coffee makers), and so on. MI was founded in 1998 by Samuel Abdesselam. Sam has maintained full ownership of MI, deciding not to take it public when so many other recycling companies were going public. While Sam is the only sharcholder. MI does have a substantial bank loan and the bank requires an annual audit of MI's financial statements and MI follows ASPE. Sam has a background in operations, but is also very strong in accounting. It is now early 2021 and you are the controlle for MI. hav ing been hired just days before the December 31.2020, year cnd. In October 2020, Sam decided to step away from the basiness and spend more time at his second home in Florida. In order to ensure there was someone at the MI ficility to oversee production and day-to-day operations, Sam hired a chief operating officer. Fred Finklestcin. Fred's background is sales and operations and he has limited knowledge of accounting. Fred tried to run the accounting side of MI when he was hired, but determined that it wasn't his area of strength. He received Sam's permission to hire you to help him with accounting for some of the activities in preparation for year end, and to help him understand the accounting function better. Required Sam has some sery specific activitics for you and has provided you with the information he requires in Exhibit I. Prepare a report to Sam that unswers his questions and be sure to provide him with all the necessary backup and calculations to support your discussion. - It is. MEs policy to prorate depreciation in the year of acquisition I like to know why and for you to make any correcting entry that and year of disposal (based on the month acquired or disposed). you feel is appropriate. Depreciation is only calculated and reconded once per year. at year end, unless an asset is sold. - MI sells to many customens on credit. MI employs a credit - On March 1, 2020. MM purchased a new delivery truck with a manager who reviews a client's financial history prior to cost of 554,000 , a residoal value of S3,000, and a useful life of allowing them to buy on credit. It is MI's policy to use the cight years. The truck is being depreciated on a straight-tire allowance for doubtrul accounts method based upon the aging of basis. Fred would like you to calculate and prepare the journal receivables. The balance is adjused yearly affer taking into entry to record the depreciation on the truck for the December account any adjustments for customers' accounts written off. 3. 2080, yeur chi. A snaphhot of MI's current accounts receivable balance at year - Fred is alse considering selling the truck on March 1, 2021. end shows that it has a balance of 5529.200 with an allowance for He cypecis to be able to get $45,000 eash for it and would doubtulul accounts debit balance of $6,000. (Note that this is prior like to know what the accounting implication would be to any adjusting joumal entries that you would make.) A more. if this happenca. He feels that he would understand it detailed breakdown of the accounts receivable balance shows the better if you provided a journal entry with supporting calculations. - During 2020, MI purchaved a parcel of land with a buildiog on it across the street from its current location. The purchase price was S150.000 for the land and the building. M1 intends to build a new production warchouse on the land and demolished the old following amounts aged: building on it. The cost of demolishing the huilding was $20 (ko1) of $30.000 from a customer, Cuthroat Kitchens. This customer and MI was able to recoup $8.000 ) of these costs by selling the went bankrupt in Nosember 2020 , and there is no possibility of serap to a recyeler. Fred is unsure of how this should be accounted for and has anked you to provide the joumal entry rectiving payment from it. Fred doesn't know what to do with this with support. amount but knows that you will. - MI also purchased new equipment on Nosember 1, 20120. The It is saandard MI policy that 2% of receivables from 0 to 3 ) equipanent cost $125,000 In addition, MI had to pay $5.000 in shipping fees to have the cquipaknt delivened and 58.000 to have a cement pad poured for the installation of equipment. Fred believes there was 515 , 900 of Jabour downeine as a recult of the insaallation. The equipment has an expected salvace value of dayn will ultimately be uncollectible, 45 for 3160 days, 20% for 6190 days, and 805 igreater than 90 days will be uncollectible. This policy is implemented after adjusting for any amounts at year end that will delinitely not be collecled. - In January. MIt decided to stop using a significant piece of manufacturing equipment. The equipment, purchased in 2018 , is 58,(00) and it is standard MI proctige to deprecate equipmicat still quile uselul because it can be retrofited to produse many using a declining balance rate of 20 ig. Fred hav usked you to ma up the equipment on the books at the total pose of $153,000 and recurd the depreciation for the ycar end. - Fred carne to you and wanted to know why the land across the street that was purchased in 2020 could not be recorded at the cstimated fair value of $800,000. Since we purchased that land. prices have skyrocketed in the area. Jus yesterday, thad a call from a casino developer asking if they could buy it for $780,000. I think we could casily get 5800000 for it, but Sam doesn't want to sell it. I think we should necord it at what we could get for it. What do you think? According to the board of directors' meeting minutes, while - During 2020, Fred worked hard to attract new bosiness. In I I only three years old and still has considerable life. the comNovember, he managed to sign a contract with Simcoe Toys I pany may continue to use it to produce some units until a (ST) that would see MI selling 500,000kg of recycled plastic bayer is found. to ST over the next two years at a price of 52 per kilogram. 1 Management is responsible for these asset disposal decisions. Fred is guite excited aboat the contract and the fact that ST Assets can be ready within 30 days" notice, and the marketing paid $200.000 in advance of the start of production. The _Iepartment has begun advertising on local websites in order to amount was received December 1,2020. As of December 31. sell the equipanent. 2020, MI had produced and delivered 50.000kg of recycled Based on the area in which MI is located, there are many manplastic to ST. You noted to Fred that it appears that the ufacturer and a sale should occur in the short term. When it was \$200.000 deposit was recorded as revenue. Fred has asked yod _ advertised for sale in January 2020, MI posted an asking price of if thene is anything wrong with that entry. If there is, he would S450.000 for the equipment. Meltdown Incorporated Ticpotanil Mictiarty fiequired Drpexiation is caly clculatel and mosendal one per year, a gear ind, whish at aicet to wid. - Trodu itw colididring adlaye the eud ve Mosh 1. 2021. He evpecui to be ablo in gre 345.000 cuabr fer in and woold fidminer anowals yood towe if you pochided a jounal cory with woporiet colkulation. vifin wrond tivide the 4egrocuenin for the jear end. - thos cars io yee ave wimiod is inow why the lod anoos the fran a cante deyhpor suling if two doold twe is fire 570000 Whe do you dest - Deriag Yoso, Frod vorked hard wo atwat new buised lo brace in fived. Meltdown Incorporated Co-authored with Stephanie McGarry Laurentian Universiry Meltdown Incorporated (MI) recycles plastic and then sells it to manufacturing companies to produce toys, household items (such as coffee makers), and so on. MI was founded in 1998 by Samuel Abdesselam. Sam has maintained full ownership of MI, deciding not to take it public when so many other recycling companies were going public. While Sam is the only sharcholder. MI does have a substantial bank loan and the bank requires an annual audit of MI's financial statements and MI follows ASPE. Sam has a background in operations, but is also very strong in accounting. It is now early 2021 and you are the controlle for MI. hav ing been hired just days before the December 31.2020, year cnd. In October 2020, Sam decided to step away from the basiness and spend more time at his second home in Florida. In order to ensure there was someone at the MI ficility to oversee production and day-to-day operations, Sam hired a chief operating officer. Fred Finklestcin. Fred's background is sales and operations and he has limited knowledge of accounting. Fred tried to run the accounting side of MI when he was hired, but determined that it wasn't his area of strength. He received Sam's permission to hire you to help him with accounting for some of the activities in preparation for year end, and to help him understand the accounting function better. Required Sam has some sery specific activitics for you and has provided you with the information he requires in Exhibit I. Prepare a report to Sam that unswers his questions and be sure to provide him with all the necessary backup and calculations to support your discussion. - It is. MEs policy to prorate depreciation in the year of acquisition I like to know why and for you to make any correcting entry that and year of disposal (based on the month acquired or disposed). you feel is appropriate. Depreciation is only calculated and reconded once per year. at year end, unless an asset is sold. - MI sells to many customens on credit. MI employs a credit - On March 1, 2020. MM purchased a new delivery truck with a manager who reviews a client's financial history prior to cost of 554,000 , a residoal value of S3,000, and a useful life of allowing them to buy on credit. It is MI's policy to use the cight years. The truck is being depreciated on a straight-tire allowance for doubtrul accounts method based upon the aging of basis. Fred would like you to calculate and prepare the journal receivables. The balance is adjused yearly affer taking into entry to record the depreciation on the truck for the December account any adjustments for customers' accounts written off. 3. 2080, yeur chi. A snaphhot of MI's current accounts receivable balance at year - Fred is alse considering selling the truck on March 1, 2021. end shows that it has a balance of 5529.200 with an allowance for He cypecis to be able to get $45,000 eash for it and would doubtulul accounts debit balance of $6,000. (Note that this is prior like to know what the accounting implication would be to any adjusting joumal entries that you would make.) A more. if this happenca. He feels that he would understand it detailed breakdown of the accounts receivable balance shows the better if you provided a journal entry with supporting calculations. - During 2020, MI purchaved a parcel of land with a buildiog on it across the street from its current location. The purchase price was S150.000 for the land and the building. M1 intends to build a new production warchouse on the land and demolished the old following amounts aged: building on it. The cost of demolishing the huilding was $20 (ko1) of $30.000 from a customer, Cuthroat Kitchens. This customer and MI was able to recoup $8.000 ) of these costs by selling the went bankrupt in Nosember 2020 , and there is no possibility of serap to a recyeler. Fred is unsure of how this should be accounted for and has anked you to provide the joumal entry rectiving payment from it. Fred doesn't know what to do with this with support. amount but knows that you will. - MI also purchased new equipment on Nosember 1, 20120. The It is saandard MI policy that 2% of receivables from 0 to 3 ) equipanent cost $125,000 In addition, MI had to pay $5.000 in shipping fees to have the cquipaknt delivened and 58.000 to have a cement pad poured for the installation of equipment. Fred believes there was 515 , 900 of Jabour downeine as a recult of the insaallation. The equipment has an expected salvace value of dayn will ultimately be uncollectible, 45 for 3160 days, 20% for 6190 days, and 805 igreater than 90 days will be uncollectible. This policy is implemented after adjusting for any amounts at year end that will delinitely not be collecled. - In January. MIt decided to stop using a significant piece of manufacturing equipment. The equipment, purchased in 2018 , is 58,(00) and it is standard MI proctige to deprecate equipmicat still quile uselul because it can be retrofited to produse many using a declining balance rate of 20 ig. Fred hav usked you to ma up the equipment on the books at the total pose of $153,000 and recurd the depreciation for the ycar end. - Fred carne to you and wanted to know why the land across the street that was purchased in 2020 could not be recorded at the cstimated fair value of $800,000. Since we purchased that land. prices have skyrocketed in the area. Jus yesterday, thad a call from a casino developer asking if they could buy it for $780,000. I think we could casily get 5800000 for it, but Sam doesn't want to sell it. I think we should necord it at what we could get for it. What do you think? According to the board of directors' meeting minutes, while - During 2020, Fred worked hard to attract new bosiness. In I I only three years old and still has considerable life. the comNovember, he managed to sign a contract with Simcoe Toys I pany may continue to use it to produce some units until a (ST) that would see MI selling 500,000kg of recycled plastic bayer is found. to ST over the next two years at a price of 52 per kilogram. 1 Management is responsible for these asset disposal decisions. Fred is guite excited aboat the contract and the fact that ST Assets can be ready within 30 days" notice, and the marketing paid $200.000 in advance of the start of production. The _Iepartment has begun advertising on local websites in order to amount was received December 1,2020. As of December 31. sell the equipanent. 2020, MI had produced and delivered 50.000kg of recycled Based on the area in which MI is located, there are many manplastic to ST. You noted to Fred that it appears that the ufacturer and a sale should occur in the short term. When it was \$200.000 deposit was recorded as revenue. Fred has asked yod _ advertised for sale in January 2020, MI posted an asking price of if thene is anything wrong with that entry. If there is, he would S450.000 for the equipment