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In 2017,Graham Cracker Co

question 24

Essay

In 2017,Graham Cracker Co.sells a building with a cost of $10 million and undepreciated capital cost (UCC)of $5 million for tax purposes.For financial reporting,the building has carrying amount of $7 million.The sale price of the building is $3 million.Aside from the sale of the building,the company has other income (before taxes)of $5 million.There are no other permanent or temporary differences.The company faces an income tax rate of 30%.
Required:
Provide the journal entries for the company for 2017.


Definitions:

Average Product

The output per unit of input, such as the quantity of goods produced per worker, used to measure productivity.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, whilst holding other inputs constant.

Total Product

The total output of goods or services produced by a firm during a given period of time.

Diminishing Marginal Returns

A principle stating that as more of a production input is added, holding all others constant, the resulting additional output will eventually decrease.

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