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At the beginning of 2011, the Healthy Life Food Company purchased equipment for $42 million to be used in the manufacture of a new line of gourmet

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At the beginning of 2011, the Healthy Life Food Company purchased equipment for $42 million to be used in the manufacture of a new line of gourmet frozen foods. The equipment was estimated to have a 10-year service life and no residual value. The straight-line depreciation method was used to measure depreciation for 2011 and 2012.

Late in 2013, it became apparent that sales of the new frozen food line were significantly below expectations. The company decided to continue production for two more years (2014 and 2015) and then discontinue the line. At that time, the equipment will be sold for minimal scrap values.

The controller, Heather Meyer, was asked by Harvey Dent, the company’s chief executive officer (CEO), to determine the appropriate treatment of the change in service life of the equipment. Heather determined that there has been an impairment of value requiring an immediate write-down of the equipment of $12,900,000. The remaining book value would then be depreciated over the equipment’s revised service life.

The CEO does not like Heather’s conclusion because of the effect it would have on 2013 income. “Looks like a simple revision in service life from 10 years to 5 years to me,” Dent concluded. “Let’s go with it that way, Heather.”

What is the difference in before-tax income between the CEO’s and Heather’s treatment of the situation?

Discuss Heather Meyer’s ethical dilemma. Do you agree with the ethical perspectives of your classmates? What implications could this have on future Healthy Life Food Company dealings?

Please answer all the questions. Thank you. Don’t miss anyone question.

 
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Quality Appliances purchased equipment for $262,000.

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On April 30, 2018, Quality Appliances purchased equipment for $262,000. The estimated service life of the equipment is six years and
the estimated residual value is $19,000. Quality’s fiscal year ends on December 31. Required: Calculate depreciation for 2018 and 2019 using each of the three methods listed. Quality calculates partial year depreciation based on
the number of months the asset is in service. (Do not round intermediate calculations. Round your final answers to nearest whole

 
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On April 30, 2018, Quality Appliances purchased equipment for $262,000. The estimated service life of the equipment is six years and the estimated

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Could someone can help me to fix this problem? This problem I don’t know how to fix and give me an explanation?

 
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James Company began the month of October with inventory of $20,000. The following inventory transactions occurred during the month:

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James Company began the month of October with inventory of $20,000. The following inventory transactions occurred during the month:

  1. The company purchased merchandise on account for $29,500 on October 12, 2018. Terms of the purchase were 2/10, n/30. James uses the net method to record purchases. The merchandise was shipped f.o.b. shipping point and freight charges of $550 were paid in cash.
  2. On October 31, James paid for the merchandise purchased on October 12.
  3. During October, merchandise costing $18,750 was sold on account for $29,000.
  4. It was determined that inventory on hand at the end of October cost $30,710.

Required:

1. Assuming that the James Company uses a periodic inventory system, prepare journal entries for the above transactions including the adjusting entry at the end of October to record cost of goods sold.

2. Assuming that the James Company uses a perpetual inventory system, prepare journal entries for the above transactions.

 
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