Dean manufacturing is planning to construct expanded, Ask an Expert

Accounting

Dean manufacturing is planning to construct expanded facilities and will finance a portion of its new plant with proceeds from the sale of its current plant. To ensure that its operations will not be interrupted, Dean will sell its current plant and lease it back for the estimated 2 year construction period of its new facilities. Deans current plant is estimated to have a useful life of 25 years. Dean bought the plant 9 years ago for $200,000 and the asset has an accumulated depreciation of $140,000. Dean signed an agreement to sell the plant for $350,000 January 1 year 10 and Lease it back for $15,000 per year, deans incremental borrowing rate is 6%. Present value factors for annuity

2 years- 6% =1.833
23years-6%=12.303
25 years-6%=12.783

Dean uses GAAP On its December 31, year 10 financial statements Dean will defer Gain on the sale of its current plant in the amount of?

A) $290,000

B) $262,505

C) $27,495

D) $0

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9407526

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - in 2017 wildhorse corporation had net cash

Question - In 2017, Wildhorse Corporation had net cash provided by operating activities of $569,000, net cash used by investing activities of $965,000, and net cash provided by financing activities of $592,000. At Januar ...

Question - what are the steps to finding the current stock

Question - What are the steps to finding the current stock price if dividend is $.6 at the end of the year, rate of return is 10.5% and growth rate is 7.7%?

Question - what are the steps to find the expected stock

Question - What are the steps to find the expected stock value in 5 years if it is expected to pay $4.5 per share next year, required return is 12.2 percent and the growth rate is 3.4 percent?

Question - blacken company manufactures motorcycles the

Question - Blacken Company manufactures motorcycles. The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory. Data for the past five months ...

Question - on 24th may 2018 the board of abx authorised the

Question - On 24th May 2018, the board of ABX authorised the incorporation of ALCORE, a wholly owned subsidiary to develop a production plant capable of producing 50,000 tonnes of aluminium fluoride per annum? How will t ...

Question - robin corporation purchased 150000 previously

Question - Robin Corporation purchased 150,000 previously unissued shares of Nest Company's $10 par value common stock directly from Nest for $3,400,000. Nest's stockholder's equity immediately before the investment by R ...

Question - tony madison needs 248900 in 10 yearshow much

Question - Tony Madison needs $248,900 in 10 years. How much must he invest at the end of each year, at 4% interest, to meet his needs?

Question household budget1create a simple household budget

Question: Household Budget 1. Create a simple household budget, including all income and expenses. There are various templates available online to help you do this. Find one that you feel comfortable with and that fits y ...

Question - pickle incorporated acquired a 10000 bond

Question - Pickle Incorporated acquired a $10,000 bond originally issued by its 80%-owned subsidiary on January 2, 2013. The bond was issued in a prior year for $11,250, matures January 1, 2018, and pays 9% interest at D ...

Question - phil goode will receive 112000 in 19 years his

Question - Phil Goode will receive $112,000 in 19 years. His friends are very jealous of him. If the funds are discounted back at a rate of 14 percent, what is the present value of his future "pot of gold"?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert