Capital expenditures, depreciation, and disposal

merton company purchased a building on january 1, 2013, at a cost of $364,000. merton estimated that its life would be 25 years and its residual value would be $14,000.

on january 1, 2014, the company made several expenditures related to the building. the entire building was painted and floors were refinished at a cost of $21,000. a federal agency required merton to install additional pollution control devices in the building at a cost of $42,000. with the new devices, merton believed it was possible to extend the life of the building by six years.

in 2015, merton altered its corporate strategy dramatically. the company sold the building on april 1, 2015, for $392,000 in cash and relocated all operations to another state.

required:
1. determine the depreciation that should be on the income statement for 2013 and 2014.
2. what amount of gain or loss did merton record when it sold the building? do not round intermediate calculations.

The following cost and inventory data are taken from the accounting records of mason company for the year just completed: costs incurred: direct labor cost $ 90,000 purchases of raw materials $ 134,000 manufacturing overhead $ 205,000 advertising expense $ 45,000 sales salaries $ 101,000 depreciation, office equipment $ 225,000 beginning of the year end of the year inventories: raw materials $ 8,100 $ 10,300 work in process $ 5,900 $ 21,000 finished goods $ 77,000 $ 25,800 required: 1. prepare a schedule of cost of goods manufactured. 2. prepare the cost of goods sold section of mason company’s income statement for the year.

Banana computers has decided to procure processing chips required for its laptops from external suppliers instead of manufacturing them in their own facilities. how will this decision affect the firm? a. the firm will be protected against the principal-agent problem. b. the firm's administrative costs will be low because of necessary bureaucracy. c. the firm will have more flexibility in purchasing and comparing prices of goods and services. d. the firm will have high-powered incentives, such as hourly wages and salaries.

Sean lives in dallas and runs a business that sells boats. in an average year, he receives $722,000 from selling boats. of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. he owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. assume that the value of this showroom does not depreciate over the year. also, if sean does not operate this boat business, he can work as a paralegal, receive an annual salary of $21,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. no other costs are incurred in running this boat business. identify each of sean's costs in the following table as either an implicit cost or an explicit cost of selling boats. implicit costexplicit costthe wages and utility bills that sean pays the rental income sean could receive if he chose to rent out his showroom the salary sean could earn if he worked as a paralegal the wholesale cost for the boats that sean pays the