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- Ngo Company purchased a truck for $54,000. Sales tax amounted to $5,400; shipping costs amounted to $1,200; and one-year registration of the truck was $100. What is the total amount of costs that should be capitalized? A. $60,600 B. $66,100 C. $54,000 D. $59,400For each of the following transactions, state whether the cost would be capitalized (C) or recorded as an expense (E). A. Purchased a machine, $100,000; gave long-term note B. Paid $600 for ordinary repairs C. Purchased a patent for $45,300 cash D. Paid $200,000 cash for addition to old building E. Paid $20,000 for monthly salaries F. Paid $250 for routine maintenance G. Paid $16,000 for major repairsChapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
- N3. On June 1, ABC Co. purchased a delivery truck for $ 6,200 in cash. The truck was repainted at a cost of $ 700 and a new battery (costing $ 60) and tires (costing $ 275) were installed. The truck has an estimated useful life of 5 years and expected salvage value of $ 825. The company uses DD method for the first 2 years and changed its method to SL method. Calculate the depreciation expense of above fixed asset during its useful life, and show the journal entries.A truck was purchased for $58,000 and depreciates $6560 per year. Suppose that the vehicle is depreciated so that it holds 60% of its value from the previous year. Write an exponential function of the form =yV0bt , where V0 is the initial value and t is the number of years after purchase.18- Ghazi Textiles bought a conveyor belt that is classified as 3-year asset for MACRS.The conveyor belt cost $100,000.What is the amount of the book value at the end of year 3? Year Depreciation Allowance % 1 33.00 2 45.00 3 15.00 4 7.00 19- Temecula Motors bought a car washing machine, that is classified as 3-year asset for MACRS.The machine cost $9,800. What is the book value at the end of year 3? Year Depreciation Allowance 1 33.33% 2 44.45% 3 14.81% 4 7.41%
- During the current year, Airport Auto Rentals purchased 60 new automobiles at a cost of $14,000per car. The cars will be sold to a wholesaler at an estimated $5,000 each as soon as they have beendriven 50,000 miles. Airport Auto Rentals computes depreciation expense on its automobiles bythe units-of-output method, based on mileage.a. Compute the amount of depreciation to be recognized for each mile that a rental automobile isdriven.b. Assuming that the 60 rental cars are driven a total of 1,770,000 miles during the current year,compute the total amount of depreciation expense that Airport Auto Rentals should recognizeon this fleet of cars for the year.c. In this particular situation, do you believe the units-of-output depreciation method achieves abetter matching of expenses with revenue than would the straight-line method? Explain.Computer Purchased for 15000 $, Insurance was paid of 2000$ Estimated useful life is 4 years Residual Value is 4000 $ Deprecion percenatge is 30% per annum Calculate the Depreciation of the computer for 4 years by diminishing method.44-Fahad Express LLC is planning to buy a vehicle for its courier business. The cost of the Vehicle is RO 16000 and the useful life is 5 years. The vehicle was depreciated using Sum of Years digit method. The balance shown in the accumulated depreciation account at the end of third year is a. RO 14667 b. RO 10667 c. RO 17333 d. RO 53333
- The following information is available December 31, 2020: (i) Store Supplies on hand on December 31, 2020, amounted to $255,500. (ii) Insurance of $2,775,000 was paid on January 1, 2020, for the 15-months to March 31, 2021 (iii) Prepaid rent expired December 31, 2020, amounts to $850,000 (iv) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $50,000. (v) The machinery cost includes two coffee drink machines purchased for $900,000 each by the company on January 1, 2014. The double-declining balance method of depreciation is used to compute the machinery’s depreciation charges and their expected useful life is 10 years or 100,000 drinks. In 2014, 5,000 drinks were sold, 6,500 in 2015, 7,800 in 2016, 9,000 in 2017, 11,500 in 2018, 12,800 in 2019 15,900 sold in 2020. The residual value on both machines is $96,637 each. On September 1, 2020, the company sold one of the coffee drinks…The following information is available December 31, 2020: (i) Store Supplies on hand on December 31, 2020, amounted to $255,500. (ii) Insurance of $2,775,000 was paid on January 1, 2020, for the 15-months to March 31, 2021 (iii) Prepaid rent expired December 31, 2020, amounts to $850,000 (iv) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $50,000. (v) The machinery cost includes two coffee drink machines purchased for $900,000 each by the company on January 1, 2014. The double-declining balance method of depreciation is used to compute the machinery’s depreciation charges and their expected useful life is 10 years or 100,000 drinks. In 2014, 5,000 drinks were sold, 6,500 in 2015, 7,800 in 2016, 9,000 in 2017, 11,500 in 2018, 12,800 in 2019 15,900 sold in 2020. The residual value on both machines is $96,637 each. On September 1, 2020, the company sold one of the coffee drinks…The following information is available December 31, 2020: (i) Store Supplies on hand on December 31, 2020, amounted to $255,500. (ii) Insurance of $2,775,000 was paid on January 1, 2020, for the 15-months to March 31, 2021 (iii) Prepaid rent expired December 31, 2020, amounts to $850,000 (iv) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $50,000. (v) The machinery cost includes two coffee drink machines purchased for $900,000 each by the company on January 1, 2014. The double-declining balance method of depreciation is used to compute the machinery’s depreciation charges and their expected useful life is 10 years or 100,000 drinks. In 2014, 5,000 drinks were sold, 6,500 in 2015, 7,800 in 2016, 9,000 in 2017, 11,500 in 2018, 12,800 in 2019 15,900 sold in 2020. The residual value on both machines is $96,637 each. On September 1, 2020, the company sold one of the coffee drinks…
