LAC Co. is a public company that decides to discontinue its operations on June 1, 2020. The building of the discontinued operations was purchased on January 1, 2016 for $700,000. The annual depreciation is $37,500. The fair value of the building on June 1, 2020 was $566,000. The costs to sell were $10,000. In addition, the following information was provided for the 2020 year:
• Sales (including $120,000 generated by discontinued operations) was equal to $600,000
• Expenses (including $132,000 generated by discontinued operations before recording depreciation and impairment loss) was equal to $330,000

(1) Prepare the journal entries to record the depreciation for the building and its reclassification as held for sale in 2020. Assume value in use is lower than net realizable value.
(2) Prepare a revised statement of income for the year ended December 31, 2020 in good form, assuming the tax rate is 25%.

Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?