Ecklund Company purchased land and a building on January 1, 2010. Management's best estimate of the value of the land was $100,000 and of the building $200,000. However, management told the accounting department to record the land at $220,000 and the building at $80,000. The building is being depreciated on a straight-line basis over 20 years with no salvage value. Why do you suppose management requested this accounting treatment? Is it ethical?
Part A: Answer each of the following questions. Be sure to show all of your work and calculations.
Part A: Answer each of the following questions. Be sure to show all of your work and calculations. 1. Woody's Cafe's real estate tax of $1,110.85 was due on November 1, 2013. Due to financial problems, Woody was unable to pay his cafe's real estate tax bill until January 15, 2014. The penalty for late payment is 81/ 4% ordinary interest.Answer the following questions: (a) How much is the penalty Woody must pay (b) What did Woody pay on January 15? Round all answers to the nearest cent. 2. Jane's April 1 inventory had a cost of $48,000 and a retail value of $70,000. During April, net purchases cost $210,000 with a retail value of $390,000. Net sales at retail for Jane for April were $280,000. Calculate the cost of ending inventory using the retail inventory method. (Round to the nearest hundredth percent.) 3. Use the below information to calculate the (a) net sales, (b) gross profit, (c) total operating expenses, and (d) net income.Sales returns $700 Rent expense $1,...
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