Pedroni Oil Company purchased packaging equipment on January 8 for $72,000.  The equipment was expected to have a useful life of three years or 18,000 operating hours, and a residual value of $4,500.  The equipment was used for 7,600 hours during year 1, 6,000 hours in year 2, and 4,400 hours in year 3.   Determine the amount of depreciation expense for the three years ending December 31, by the Straight line method, The units of activity method, and the double declining balance method.  Finally determine the total amount of depreciation expense for the three ears by each method.

Question

.  Pedroni Oil Company purchased packaging equipment on January 8 for $72,000.  The equipment was expected to have a useful life of three years or 18,000 operating hours, and a residual value of $4,500.  The equipment was used for 7,600 hours during year 1, 6,000 hours in year 2, and 4,400 hours in year 3.

 

Determine the amount of depreciation expense for the three years ending December 31, by the Straight line method, The units of activity method, and the double declining balance method.  Finally determine the total amount of depreciation expense for the three ears by each method. 

 

  1. Pedroni Enterprises issues a $260,000, 45 day 5 % note to Zorzi Industries for merchandise inventory

 

  1. Journalize Pedroni Enterprises entries to record:
  2. The issuance of the note
  3. The payment of the note at maturity
  4. Journalize Zorzi Industries entries to record:
  5. The receipt of the note
  6. Receipt of the payment of the note at maturity
  7. On July 31, 2019 the balances of the accounts appearing in the ledger of Pedroni Interiors company a furniture wholesales, are as follows.

Accumulated Depreciation – Building      $365,000        Ray Zorzi – Capital            $530,000

Administrative Expenses                               440,000        Ray Zorzi – Drawing              15,000

Building                                                            810,000        Sales                                    1,437,000

Cash                                                                   78,000          Sales tax Payable                     4,500

Cost of Merchandise Sold                            775,000          Selling Expense                    160,000

Interest Expense                                                 6,000           Store Supplies                         16,000

Merchandise Inventory                                115,000            Store Supplies Expense       21,500

Notes Payable                                                 100,000

 

Instructions:  Prepare the July 31, 2019 closing entries for Pedroni Interiors Company

 

 

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