(a) Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (b) Prepare the adjusting entry necessary at the end of the year to record depreciation for the year. (c)Prepare the entry to record the sale of asset D for cash of $4,800. It was used for 6 years, and depreciation was entered under the composite method.

(a) Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (b) Prepare the adjusting entry necessary at the end of the year to record depreciation for the year. (c)Prepare the entry to record the sale of asset D for cash of $4,800. It was used for 6 years, and depreciation was entered under the composite method.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 9RE

See similar textbooks

Similar questions

Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on April 1, Year 1. Calculate the depreciation for Year 1 and Year 2 using the double-declining-balance method. Round to the nearest dollar.
Which of the following is not true about the MACRS depreciation system: A salvage value must be determined before depreciation percentages are applied to depreciable real estate. Residential rental buildings are depreciated over 27.5 years straight-line. Commercial real estate buildings are depreciated over 39 years straight-line. No matter when during the month depreciable real estate is purchased, it is considered to have been placed in service at mid-month for MACRS depreciation purposes.
In Year 1, Utica Machinery Company uses the asset from RE11-4 for 7,500 hours. Prepare the journal entry to record the depreciation.
(Composite Depreciation) Presented below is information related to LeBron James Manufacturing Corporation. Asset Cost Estimated Salvage Estimated Life (in years) A $40,500 $5,500 10 B 33,600 4,800 9 C 36,000 3,600 9 D 19,000 1,500 7 E 23,500 2,500 6 Instructions(a) Compute the rate of depreciation per year to be applied to the plant assets under the composite method.(b) Prepare the adjusting entry necessary at the end of the year to record depreciation for the year.(c) Prepare the entry to record the sale of asset D for cash of $4,800. It was used for 6 years, and depreciation was entered under the composite method.
11.On December 31, 2021, Alexis Company has an item of machinery with a cost of P4,500,000 and an accumulated depreciation of P1,800,000. On this date, the machinery is found to be impaired due to obsolescence and a major physical damage. At the date of its acquisition, this machinery has an estimated useful life of ten years and was depreciated using the straight line basis.The entity made an assessment and test for recoverability of the asset and determined that the machinery’s fair value is P2,500,000 and estimated disposal cost is P250,000. The entity expects net future undiscounted cash flows related to the continued use and eventual disposal of the machinery of P2,600,000. The net future discounted cash flows related to the continued use and eventual disposal of the machinery using a discount rate of 10% is P2,180,000. How much is the depreciation expense of this machinery for the year ended December 31, 2022?
At the start of its business, Snell Corp. decided to use the composite method of depreciation and prepared the following schedule of machinery owned. Total cost Residual value Useful life Machine A 275,000 25,000 20 Machine B 100,000 10,000 15 Machine C 20,000 - 5 Snell computes depreciation on the straight-line method. Based on the information presented, the composite life of these assets (in years) should be 3 c. 18.0 0 d. 19.8
The following is a schedule of machinery owned by PERSEVERANCE Manufacturing Company. Estimated Estimated Total Salvage Life in Cost Value Years Machine A P 600,000 P110,000 20 Machine B 315,000 30,000 10 Machine C 84,000 0 15 Machine D 107,000 7,000 5 P1,106,000 PERSEVERANCE computes depreciation on a straight-line basis. Based on the information presented, compute the: (1) Composite life of these assets (in years). (2) Composite depreciation rate.
E11.9 (LO1,2) (Component Depreciation) Morrow Manufacturing has equipment that is comprised of five components (amounts in thousands). Component Cost Estimated Residual Estimated Life (in years) A ¥40,500 5,500 10 B 33,600 4,800 9 C 36,000 3,600 8 D 19,000 1,500 7 E 23,500 2,500 6 Instructions a. Prepare the adjusting entry necessary at the end of the year to record depreciation for the year. Assume that Morrow uses straight-line depreciation. b. Prepare the entry to record the replacement of component B for cash of ¥40,000. It was used for 6 years.
On December 31, 20x1, DEF Company reported the following information:Equipment 6,250,000Accumulated depreciation 2,187,500The equipment was measured using the cost model and depreciated on a straight line basis over a 10-yearperiod.On the same date, the management decided to change to basis of measuring the equipment from the costmodel to the revaluation model.The equipment had a fair value of ₱5,687,500 with remaining useful life of 5 years on December 31, 20x1. 1. What amount should be reported as revaluation surplus on December 31, 20x1?2. What is the depreciation of the equipment for 20x2?3. What amount should be reported as revaluation surplus on December 31, 20x2?
12. At the start of its business, ABC Corp. decided to use the composite method of depreciation and prepared the following schedule of machinery owned. Machine A - P275,000 cost; P25,000 salvage value; 20 years estimated life Machine B - 100,000 cost; 10,000 salvage value; 15 years estimated life Machine C - 20,000 cost; no salvage; 5 years estimated life ABC computes depreciation on the straight-line method. Based on the information presented, the composite life of these assets (in years) should be?
The information below was extracted from the books of Let Your Light Shine Enterprise: Non-current Asset Cost (GH¢) Date of Acquisition Date of Disposal Proceed from Disposal (GH¢) Machine A 30,000 03/01/15 31/08/17 18,000 Machine B 40,000 01/07/15 - - Machine C 60,000 30/09/15 01/07/17 50,000 Machine D 80,000 01/04/16 - - Additional information: a) As per the enterprise’s accounting policy, depreciation charged is pro-rated on the basis of months of use. All acquisitions and disposals are on cash basis; b) Machines A and B are depreciated at a rate of 20% on reducing balance basis while Machines C and D at 10% on straight line basis; and c) Accounts are prepared to 31st December every year. You are required to: I. Show the relevant accounts for machinery for years to 31st December, 2017; II. Show the Income statement and the statement of financial position for each of the…
Equipment was acquired at the beginning of the year at a cost of $78,660. The equipment was depreciated using the straight-line method based on an estimated useful life of 6 years and an estimated residual value of $7,980. a. Compute the depreciation expense for the first year.$fill in the blank 1a46def96073f8b_1 b. Assuming the equipment was sold at the end of the second year for $59,500, determine the gain or loss on sale of the equipment.$fill in the blank 1a46def96073f8b_2 c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.