In recent years, Ivanhoe Transportation purchased three used buses. Because of frequent turnover in the accounting department, different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is summarized below. Residual Useful Life Depreciation Method Bus Acquired Cost Value in Years 1. 1/1/18 £ 95,600 £6,000 Straight-line 1/1/18 125,000 10,500 4 Declining-balance 1/1/19 90,600 8,000 4 Units-of-activity For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 118,000. Actual miles of use in the first 3 years were: 2019, 27,500; 2020, 36,000; and 2021, 33,000. Calculate depreciable cost per mile for Bus 3. (Round answer to 2 decimal places, eg. 0.50.) Depreciable cost per mile

In recent years, Ivanhoe Transportation purchased three used buses. Because of frequent turnover in the accounting department, different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is summarized below. Residual Useful Life Depreciation Method Bus Acquired Cost Value in Years 1. 1/1/18 £ 95,600 £6,000 Straight-line 1/1/18 125,000 10,500 4 Declining-balance 1/1/19 90,600 8,000 4 Units-of-activity For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 118,000. Actual miles of use in the first 3 years were: 2019, 27,500; 2020, 36,000; and 2021, 33,000. Calculate depreciable cost per mile for Bus 3. (Round answer to 2 decimal places, eg. 0.50.) Depreciable cost per mile

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets

Section: Chapter Questions

Problem 1AFE

See similar textbooks

Similar questions

Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
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.
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
Group and Composite Depreciation Chcadle Company purchased a fleet of 20 delivery trucks for 8,000 each on January 2, 2019. It decided to use composite depreciation on a straight-line basis and calculated the depreciation from the following schedule: Cheadle actually retired the trucks according to the following schedule (assume each truck was retired at the beginning of the year): Required: 1. Prepare the journal entries necessary to record the preceding events. 2. Assume that the company expected all the trucks to last 4 years and be retired for 1,600 each. Using group depreciation, prepare journal entries for all 6 years, assuming the company retired the trucks as shown by the latter schedule.
In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a diff erent accountant selected the depreciation methodfor each bus, and various methods were selected. Information concerning the buses is summarizedas follows.Salvage Useful LifeBus Acquired Cost Value in Years Depreciation Method1 1/1/18 $ 96,000 $ 6,000 5 Straight-line2 1/1/18 110,000 10,000 4 Declining-balance3 1/1/19 92,000 8,000 5 Units-of-activityFor the declining-balance method, the company uses the double-declining rate. For the units-of-activitymethod, total miles are expected to be 120,000. Actual miles of use in the fi rst 3 years were 2019, 24,000;2020, 34,000; and 2021, 30,000.Instructionsa. Compute the amount of accumulated depreciation on each bus at December 31, 2020.b. If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this busin (1) 2018 and (2) 2019?
In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows. Bus Acquired Cost SalvageValue Useful Lifein Years DepreciationMethod 1 1/1/17 $ 96,000 $ 6,000 5 Straight-line 2 1/1/17 110,000 10,000 4 Declining-balance 3 1/1/18 92,000 8,000 5 Units-of-activity For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 120,000. Actual miles of use in the first 3 years were 2018, 24,000; 2019, 34,000; and 2020, 30,000. For Bus #3, calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost $ per mil
In recent years, Whispering Winds Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is summarized as follows. Bus Acquired Cost SalvageValue Useful Lifein Years DepreciationMethod 1 1/1/18 $ 95,000 $ 5,000 4 Straight-line 2 1/1/18 110,000 10,000 4 Declining-balance 3 1/1/19 88,000 7,500 4 Units-of-activity For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 115,000. Actual miles of use in the first 3 years were 2019, 23,000; 2020, 31,000; and 2021, 29,000. For Bus #3, calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.)…
In the recent years, Riverbed Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each bus, and various methods have been used. Information concerning the buses is summarized in the table below. Bus Acquired Cost Salvage Value Useful Life in Years Depreciation Method 1 1/1/20 96,200 5,000 4 Straight-Line 2 1/1/20 121,000 10,000 4 Declining-Balance 3 1/1/21 95,100 9,000 4 Units-of Activity For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 123,000. Actual miles of use in the first 3 years were 2021, 28,00; 2022, 32,000; and 2023, 30,500. For bus #3, calculate depreciation expense per mile under the units-of-activity method. (95,100-9,000) / 123,000 = 0.7 per mile Compute the amount of accumulated depreciation on…