1. Suppose the business purchased a new car with a value of $30,000, on January 1, 2019. It is estimated that the car will last 6 years in the business, at which time it can be sold for $6000. a) Calculate the Annual Depreciation Expense for 1 years, b) Create the year 1 journal entry, c) Post how each of the 3 years will look on the balance sheet (refer to slide 25 to do this)

1. Suppose the business purchased a new car with a value of $30,000, on January 1, 2019. It is estimated that the car will last 6 years in the business, at which time it can be sold for $6000. a) Calculate the Annual Depreciation Expense for 1 years, b) Create the year 1 journal entry, c) Post how each of the 3 years will look on the balance sheet (refer to slide 25 to do this)

Name: 1. Suppose the business purchased a new car with a value of $30,000, o
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Description: 1. Suppose the business purchased a new car with a value of $30,000, on January 1, 2019. It is estimated that the car will last 6 years in the business, at which time it can be sold for $6000.a) Calculate the Annual Depreciation Expense for 1 years,b

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 2CE

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At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for major repairs Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jadas balance sheet resulting from this years transactions? What amount did Jada report on the income statement for expenses for the year?
For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. A. A landscaper received a customers order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year. B. A company divides its income statements into four quarters for the year. C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000. D. Brandys Flower Shop is forecasting its balance sheet for the next five years. E. When preparing financials for a company, the owner makes sure that the expense transactions are kept separate from expenses of the other company that he owns. F. A company records the expenses incurred to generate the revenues reported.
11) Suppose the business purchased a new truck with a value of $55,000, on January 1, 2019. It is estimated that the truck will last 8 years in the business, at which time it can be sold for $5,000. What would The Annual Depreciation Expense be using straight-line depreciation? 12) Using straight-line depreciation if the truck was depreciated on a YEARLY basis, what accounts would be used in the adjusting entry for a full year of depreciation? 1. Debit - Depreciation Expense, Truck</> Credit - Cash 2. Debit - Depreciation Expense, Truck</> Credit - Accumulated Depreciation, Truck 3. Debit - Accumulated Depreciation, Truck </> Credit - Depreciation Expense, Truck 4. Debit - Accumulated Depreciation, Truck </> Credit - Truck
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Assume a machine is bought for $300,000, and depreciation each year is $25,000. What annual adjusting entry is recorded for this depreciation? What is reported as the net book value of the machine at the end of the second year? What expense is reported for the second year?
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Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018. The purchase price was $22,600 and had a useful life of 3 years. The salvage or residual amount is 5% of the purchase price. Round to the nearest whole dollar. Calculate the total depreciation expense in 2018, 2019, 2020, and 2021 using the Double-Declining Balance Method.
Redhouse Corporation purchased a truck for $20,000 on January 1, 2023. The truck has an estimated salvage value of $5,000 and is expected to last five years. Redhouse Corporation prepares adjusting entries only at year-end. Which of the following is the necessary adjusting entry on December 31, 2023? (See your Chapter 3 notes, page 6) Debit Depreciation Expense—Trucks for $4,000, and credit Accumulated Depreciation—Trucks for $4,000. Debit Depreciation Expense—Trucks for $5,000, and credit Accumulated Depreciation—Trucks for $5,000. Debit Accumulated Depreciation—Trucks for $3,000, and credit Depreciation Expense—Trucks for $3,000. Debit Depreciation Expense—Trucks for $3,000, and credit Accumulated Depreciation—Trucks for $3,000. Debit Accumulated Depreciation—Trucks for $4,000, and credit Depreciation Expense—Trucks for $4,000. Debit Accumulated Depreciation—Trucks for $5,000, and credit Depreciation Expense—Trucks for $5,000.
Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018. The purchase price was $22,600 and had a useful life of 3 years. The salvage or residual amount is 5% of the purchase price. Round to the nearest whole dollar. Calculate the total depreciation expense in 2018, 2019, 2020, and 2021 using the straight-line method.
On January 1, Phillips Company paid $15,000 to purchase a large piece of equipment that will last 5 years. Required: 1. How much is depreciated by the end of the first year? 2. What will be the book value of the equipment at the end of the first year, after the adjusting entries have been prepared and posted? Note: Use straight-line depreciation and no salvage value.