Question: Ravhan Company purchased equipment at a cost of $80,000 on January 01, 2014. This equipment has alife time of 4 years which is equivalent to 100,000 operating hours and a salvage value of $5,000. Actualannual usages are:Year2014201520162017Actual Usage inhours30,00020,00040,00010,000Prepare depreciation schedules for the following methodsa) Double Declining Balance Methodb) Units-Of-Activity Method

Given in the question: Date of Purchase 01 January, 2014 Cost of Equipment 80000…

Answered: Prepare depreciation schedules for the…

Business

Accounting

Prepare depreciation schedules for the following methods a) Double Declining Balance Method b) Units-Of-Activity 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 3RE: Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not...

See similar textbooks

Related questions

Q: 2,500,000.00 5,400,000.00 3,700,000.00 11,600,000.00

A: In the partnership there is fixed exchange ratio between the partners and profit or loss is shared…

Q: ABC Corporation reported a profit of P7,500,000 as of December 31, 2022. The company has the…

A: EPS is the earning share hares and is calculated by dividing the net income available to the…

Q: Preble Company manufactures one product. Its variable manufacturing overhead is applied to…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of…

Q: Carla Vista Garage Co. accepts the following forms of payment: Visa, MasterCard, the Carla Vista…

A: Journal entries recording is the initial step of accounting cycle process, under which atleast one…

Q: Problem 9-23 (Algo) Critiquing a Cost Report; Preparing a Performance Report [LO9-1, LO9-2, LO9- 3,…

A: The difference between actual results and flexible budget is represented as spending variance. The…

Q: Fogel Company expects to produce and sell 110,000 units for the period. The company's flexible…

A: Variable overheads are those which changes with the variation in the activity or level of…

Q: Answer in 20 minutes Mandy Corporation sells a single product. Budgeted sales for the year are…

A: Introduction: Direct materials are substances and resources which are directly related to the…

Q: Cost of goods manufactured Selling expenses Administrative expenses Sales Finished goods inventory,…

A: Cost of goods sold :- Cost of goods sold refers to the total expenses that are incurred by an…

Q: Leap Off Tours had a payroll tax liability of $67,553 during the lookback period. How frequently…

A: The payroll tax liability means the liability of the employers. In this, the employer has to deposit…

Q: Yordi Company expects to sell 1,950 units in January and 1,700 units in February. The company…

A: Introduction: The cost of goods sold budget of a firm is an important component of its operational…

Q: Determine direct materials standards. BE12.2 (LO 1) Hideo Company accumulates the following data…

A: Introduction: Materials and supplies consumed during the manufacturing of a product that are…

Q: [The following information applies to the questions displayed below.] Victory Company uses weighted…

A: Process Costing - Process costing is a method of allocating manufacturing costs to finished goods.…

Q: Wade Company expects to produce 6,000 units of product IOA during the current year. Budgeted…

A: Introduction: A static budget is something that does not change as activity levels change. As a…

Q: how much is the Legal Capital at the end of the year?

A: Legal capital refers to the amount of the corporation's equity that cannot be legally allowed to…

Q: Finch Company began its operations on March 31 of the current year. Finch has the following…

A: Cash Payment: A cash payment is when the receiver of goods or services hands over cash to the…

Q: Morgan Industries is comparing and contrasting its ending inventory value in terms of the three…

A: Three most common method of inventory valuation are Fifo method Lifo method Weighted average…

Q: NXP Corporation issues P15 par value ordinary shares during 2021. The company received subscription…

A: The subscription received for 25000 shares at P18 per share from Mr. Navarro. He paid 45% but fails…

Q: Which of the following is true of the cash payback period? a.the longer the payback, the longer the…

A: Payback period is the period under which the amount of investment is expected to be recovered.…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. HINT [See…

A: Present value is the worth of a future sum of money at the present date. The present value of…

Q: Daley Company prepared the following aging of receivables analysis at December 31. Days Past…

A: a. Computation of balance of allowance for doubtful accounts Ageing Balance Percentage…

Q: For a project that has a net investment of $1,500,000 and net cash flows of $400,000 for 5 years; Is…

A: Internal rate of return is the rate of return earned on an investment. It is the rate of return at…

Q: Exercise 9-2 (Algo) Activity Variances [LO9-2] Flight Café prepares in-flight meals for airlines in…

A: In case of Revenue, If we got less revenue in flexible budget when compared to planning budget then…

Q: Required information [The following information applies to the questions displayed below.] Astro…

A: Contribution Margin Income statement: Contribution Margin Income statement is the financial…

Q: On July 1, 2021, Matiyaga Company purchased 1,000 shares of Masipag Corp. P100 par ordinary shares…

A: In the context of the given question, we are required to compute the carrying value of Matiyaga's…

Q: On June 1, 2020, Golden Warriors Corporation declared a share capital dividend entitling its…

A: Given, Market Value per share = P100 Par value per share = P50 Shares issued = 65,000 Shares in the…

Q: Question 1 a) Telcom Ltd issued 2,000 15% debenture of Ghc1,000 each and Ghc2,000 each redeemable…

A: Dear student As per guidelines in case of multiple different questions we can answer only first one…

Q: MEME Corporation’s Retained Earnings at December 31, 2021 amounted to P2,000,000. On that date, the…

A: Dividend is the part or share of profits which is divided among the shareholders of the company. For…

Q: following pension plan information is for Jin Company at December 31, 2018. Defined benefit…

A: Company pay the pensions to employees and there must be sufficient provisions should be made so that…

Q: MM Co. had 100,000 shares of ordinary share issued and outstanding at January 1, 2021. During 2021,…

A: Shares are split by 2-for-1. Each share is converted into 2. Total shares outstanding before stock…

Q: Problem no. 5 Kennedy Decorative Tray Company uses the average method and adds materials at the…

A: Process costing is one of the costing method in which product has to go through multiple processes…

Q: Prepare the necessary journal entries for the Goodman Company for the month of January in order from…

A: Transactions for the Goodman company for the month of January given. The journal entries for the…

Q: Compute the firm’s predetermined factory overhead rate for the year. 2. Prepare journal entries…

A: 1. Predetermined factory overhead rate=Estimated factory overhead/Budgeted direct labor hours…

Q: Target

Q: Journalize the 2022 transactions. (Record journal entries in the order presented in the problem.…

A: Journal Entries Date Particulars Debit ($) Credit ($) Jul-01 Cash 10840 Dividend…

Q: The following are capital stock transactions of the BBC Corporation. Apr. 1 - Authorized to issue…

A: Journal Entry :- A journal entry is the act of recording any transaction, whether one that is…

Q: Exercise 9-15 (Algo) Flexible Budgets and Revenue and Spending Variances [LO9-1, LO9-3] Via Gelato…

A: The revenue and spending variance is the difference between actual results and flexible budget data.…

Q: Fueled by Caffeine Company is a manufacturer of travel mugs. Fueled has recently experienced…

A: Direct labor rate variance=Standard rate-Actual rate×Actual hours Direct labor efficiency…

Q: CAPITAL BUDGETING WITH INCOME TAXES Montreal Paper Company must purchase a paper sorter to replace…

A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows) IRR is a rate at…

Q: Can you do 4.

A: Contribution per unit can be calculated as follows:- Selling price - $17 per unit Less :- Variable…

Q: Saxon Products, Incorporated, is investigating the purchase of a robot for use on the company’s…

A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…

Q: The total manufacturing cost variance is a.the flexible budget variance plus the time variance b.the…

A: Variance means difference between standard cost of producing goods and actual cost of producing same…

Q: Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in…

A: Statement of Cash Flows :— It is statement of financial position which shows change in cash &…

Q: 38. On June 1, 2020, Golden Warriors Corporation declared a share capital dividend entitling its…

A: Dividends are the part or share of profits which is being distributed to the shareholders. Share…

Q: Golden Inc. is considering one of the three following courses of action: (1) paying a $0.4 cash…

A: Before action After Cash dividend After stock dividend Total Assets $1369000 $1329000 $1369000…

Q: On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of…

A: Debt means total liabilities to be paid by the company. Debt restructuring means modifying the terms…

Q: The management of Boogie Company thinks that its total costs of quality can be reduced by increasing…

A: Cost of quality is a method in which a company calculates how its resources, be it funds or time,…

Q: On January 1, Year 8, Shuswap Inc. and Kalamalka Inc. formed a new joint venture, Okanagan Inc.…

A: Date Account Titles Debit Credit 01 Jan Year 8 Shuswap Inc Equipment A/c $2,100,000 To…

Q: Internal Growth Rate (IGR) Net Income ($) Total dividend paid ($) Retention ratio (%) Total assets…

A: Besides borrowing, the rate at which an organization can grow is known as the sustainable growth…

Q: The following facts relate to Sage Corporation. 1. 2. 3. 4. 5. 6. 7. 8. Deferred tax liability,…

A: Journal Entry - It is record of every business transaction in day to day life whether it is economic…

Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

Question:

Ravhan Company purchased equipment at a cost of $80,000 on January 01, 2014. This equipment has a
life time of 4 years which is equivalent to 100,000 operating hours and a salvage value of $5,000. Actual
annual usages are:
Year
2014
2015
2016
2017
Actual Usage in
hours
30,000
20,000
40,000
10,000
Prepare depreciation schedules for the following methods
a) Double Declining Balance Method
b) Units-Of-Activity Method

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
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.
Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.
Chapman 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
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
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.
Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
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.
Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.