Prepare journal entries for the following transactions for Sanchez Co. using the general journal. Feb. 28 Machinery that cost $57,000 and had accumulated depreciation of $46,000 was sold for $2,500. Apr. 10 A van that cost $23,700 and had accumulated depreciation of $21,000 was sold for $1,250. July 16 Equipment that cost $120,000 and had accumulated depreciation of $112,000 was traded in for new equipment with a fair market value of $140,000. The old equipment and $135,000 in cash were given for the new equipment. Aug. 11 Equipment that cost $50,000 and had accumulated depreciation of $43,000 was traded in for new equipment with a fair market value of $62,000. The old equipment and $55,000 in cash were given for the new equipment. Nov. 10 A truck that cost $44,000 and had accumulated depreciation of $38,000 was traded in for a new truck with a fair market value of $58,000. The old truck and $50,000 cash were given for the new truck. If an amount box does not require an entry, leave it blank.

Grant, inc., acquired 30% of south co.’s voting stock for $200,000 on january 2, year 1, and did not elect the fair value option. the price equaled the carrying amount and the fair value of the interest purchased in south’s net assets. grant’s 30% interest in south gave grant the ability to exercise significant influence over south’s operating and financial policies. during year 1, south earned $80,000 and paid dividends of $50,000. south reported earnings of $100,000 for the 6 months ended june 30, year 2, and $200,000 for the year ended december 31, year 2. on july 1, year 2, grant sold half of its stock in south for $150,000 cash. south paid dividends of $60,000 on october 1, year 2. before income taxes, what amount should grant include in its year 1 income statement as a result of the investment?

Walsh company manufactures and sells one product. the following information pertains to each of the company’s first two years of operations: variable costs per unit: manufacturing: direct materials $ 25 direct labor $ 12 variable manufacturing overhead $ 5 variable selling and administrative $ 4 fixed costs per year: fixed manufacturing overhead $ 400,000 fixed selling and administrative expenses $ 60,000 during its first year of operations, walsh produced 50,000 units and sold 40,000 units. during its second year of operations, it produced 40,000 units and sold 50,000 units. the selling price of the company’s product is $83 per unit. required: 1. assume the company uses variable costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 2. assume the company uses absorption costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 3. reconcile the difference between variable costing and absorption costing net operating income in year 1.

Which of the following statements are false regarding activity-based costing? non-manufacturing costs are important to include when calculating the cost of each product. costs are allocated based on a pre-determined overhead rate. transitioning from traditional costing methods to activity-based costing can be complicated and costly. activity-based costing follows the same basic calculation methods as traditional costing approaches. none of the above