4 What is the net book value of the equipment on 12.31.20? Historical cost (Accumulated depreciation) Net book value at 12.31.20 5 Analysis Review the three depreciation schedules. What was the total amount of depreciation expense taken over the life of the asset in all three methods? Units of production Straight-line Double-declining balance Given your answer above explain what the difference in these three methods relates to in one word. Which one of these method would help the company achieve lower taxes in 2019 and explain why? Which one of these method would help the company achieve a stronger balance sheet in 2019 and explain why? C E F H |Historical cost Estimated useful life 2$ 270,000 6 years Salvage value Estimated useful hours $ 24,000 12,000 hours Estimated hours per year: 3,100 2019 1,100 2020 1,200 2021 2,800 2022 2,600 2023 1,200 2024 Required 1 Complete the depreciation schedule using the Double Declining Balance Method. Adventure Park, Corp Depreciation Schedule - Double Declining Balance Depreciation Expense Ending Book Balance Beginning Year Book Balance Rate # of Years 2019 2020 2021 2022 2023 2024 HINT: the last year of depreciation expense will be a plug in order not to depreciate below the salvage value. Your ending book balance should be the $24,000 salvage value. 2 Analyze the effect of depreciation on the 2020 financial statements. Page 1 Assets = Liabilities + Equity Revenues Expenses = Net Income 3 Record depreciation expense for 2020. General Journal DR CR
4 What is the net book value of the equipment on 12.31.20? Historical cost (Accumulated depreciation) Net book value at 12.31.20 5 Analysis Review the three depreciation schedules. What was the total amount of depreciation expense taken over the life of the asset in all three methods? Units of production Straight-line Double-declining balance Given your answer above explain what the difference in these three methods relates to in one word. Which one of these method would help the company achieve lower taxes in 2019 and explain why? Which one of these method would help the company achieve a stronger balance sheet in 2019 and explain why? C E F H |Historical cost Estimated useful life 2$ 270,000 6 years Salvage value Estimated useful hours $ 24,000 12,000 hours Estimated hours per year: 3,100 2019 1,100 2020 1,200 2021 2,800 2022 2,600 2023 1,200 2024 Required 1 Complete the depreciation schedule using the Double Declining Balance Method. Adventure Park, Corp Depreciation Schedule - Double Declining Balance Depreciation Expense Ending Book Balance Beginning Year Book Balance Rate # of Years 2019 2020 2021 2022 2023 2024 HINT: the last year of depreciation expense will be a plug in order not to depreciate below the salvage value. Your ending book balance should be the $24,000 salvage value. 2 Analyze the effect of depreciation on the 2020 financial statements. Page 1 Assets = Liabilities + Equity Revenues Expenses = Net Income 3 Record depreciation expense for 2020. General Journal DR CR
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 71BPSB: Depreciation Schedules Dunn Corporation acquired a new depreciable asset for $135,000. The asset has...
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Question
Transcribed Image Text:4 What is the net book value of the equipment on 12.31.20?
Historical cost
(Accumulated depreciation)
Net book value at 12.31.20
5 Analysis
Review the three depreciation schedules.
What was the total amount of depreciation expense taken over the life of the asset in all three methods?
Units of production
Straight-line
Double-declining balance
Given your answer above explain what the difference in these three methods relates to in one word.
Which one of these method would help the company achieve lower taxes in 2019 and explain why?
Which one of these method would help the company achieve a stronger balance sheet in 2019 and explain why?
Transcribed Image Text:C
E
F
H
|Historical cost
Estimated useful life
2$
270,000
6 years
Salvage value
Estimated useful hours
$
24,000
12,000 hours
Estimated hours per year:
3,100 2019
1,100 2020
1,200 2021
2,800 2022
2,600 2023
1,200 2024
Required
1 Complete the depreciation schedule using the Double Declining Balance Method.
Adventure Park, Corp
Depreciation Schedule - Double Declining Balance
Depreciation
Expense
Ending Book
Balance
Beginning
Year
Book Balance
Rate
# of Years
2019
2020
2021
2022
2023
2024
HINT: the last year of depreciation expense will be a plug in order not to depreciate below the
salvage value. Your ending book balance should be the $24,000 salvage value.
2 Analyze the effect of depreciation on the 2020 financial statements.
Page 1
Assets =
Liabilities +
Equity
Revenues
Expenses =
Net Income
3 Record depreciation expense for 2020.
General Journal
DR
CR
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