year anisea, Wilanorse, does not record any depreciation expense on the asset. In the year an asset is retr traded in, Wildhorse, Inc. takes a full year's depreciation on the asset.The following transactions occurred during 2026.a. On May 5, Machine A was sold for $15,340 cash. The company's bookkeeper recorded this retirement in the following mannerin the cash receipts journal.CashMachinery (Machine A)C.15,340b. On December 31, it was determined that Machine B had been used 2,500 hours during 2026.On December 31, before computing depreciation expense on Machine C, the management of Wildhorse, Inc. decided the usefullife remaining from January 1, 2026, was 10 years.15,340d. On December 31, it was discovered that a machine purchased in 2025 had been expensed completely in that year. This machinecost $33,040 and has a useful life of 10 years and no salvage value. Management has decided to use the double-declining-balance method for this machine, which can be referred to as "Machine E."No.Prepare the necessary correcting entries for the year 2026. Record the appropriate depreciation expense on the above-mentionedmachines. No entry is necessary for Machine D. (If no entry is required, select "No entry" for the account titles and enter O for the amounts.Round intermediate calculations to 3 decimal places, e.g. 4.589 and final answers to O decimal places, e.g. 45,892. Credit account titles areautomatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)Account Titles and Explanation▬O SearchCDebitCredit The following data relate to the Machinery account of Wildhorse, Inc. at December 31, 2025.Original costYear purchasedUseful lifeSalvage valueDepreciation methodAccum. depr. through 2025*a.CashAMachinery (Machine A)$54,280202015,34010 years$3,658Sum-of-the-years'-digits$36,816B15,340$60,1802021Machinery15,000 hours$3,540Activity$41,536C$94,400202215 years$5,900Straight-line$17,700D$94,400*In the year an asset is purchased, Wildhorse, Inc. does not record any depreciation expense on the asset. In the year an asset is retiredor traded in, Wildhorse, Inc. takes a full year's depreciation on the asset.The following transactions occurred during 2026.202410 years$5,900On May 5, Machine A was sold for $15,340 cash. The company's bookkeeper recorded this retirement in the following mannerin the cash receipts journal.Double-declining balance$18,880

Name: year anisea, Wilanorse, does not record any depreciation expense on t
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Description: year anisea, Wilanorse, does not record any depreciation expense on the asset. In the year an asset is retr traded in, Wildhorse, Inc. takes a full year's depreciation on the asset.The following transactions occurred during 2026.a. On May 5, Machine

Journal entry is the procedure for initially documenting commercial transactions in the books of…

Business

Accounting

The following data relate to the Machinery account of Wildhorse, Inc. at December 31, 2025. Original cost Year purchased Useful life Salvage value Depreciation method Accum. depr. through 2025* Cash A Machinery (Machine A) $54,280 2020 10 years $3,658 Sum-of-the-years'-digits $36,816 15,340 B 15,340 $60,180 2021 Machinery 15,000 hours $3,540 Activity $41,536 C $94,400 2022 15 years $5,900 Straight-line $17,700 D $94,400 2024 *In the year an asset is purchased, Wildhorse, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Wildhorse, Inc. takes a full year's depreciation on the asset. The following transactions occurred during 2026. 10 years $5,900 a. On May 5, Machine A was sold for $15,340 cash. The company's bookkeeper recorded this retirement in the following manner in the cash receipts journal. Double-declining balance $18,880

The following data relate to the Machinery account of Wildhorse, Inc. at December 31, 2025. Original cost Year purchased Useful life Salvage value Depreciation method Accum. depr. through 2025* Cash A Machinery (Machine A) $54,280 2020 10 years $3,658 Sum-of-the-years'-digits $36,816 15,340 B 15,340 $60,180 2021 Machinery 15,000 hours $3,540 Activity $41,536 C $94,400 2022 15 years $5,900 Straight-line $17,700 D $94,400 2024 *In the year an asset is purchased, Wildhorse, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Wildhorse, Inc. takes a full year's depreciation on the asset. The following transactions occurred during 2026. 10 years $5,900 a. On May 5, Machine A was sold for $15,340 cash. The company's bookkeeper recorded this retirement in the following manner in the cash receipts journal. Double-declining balance $18,880

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 7P: Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset,...

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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
Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000
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.
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
Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
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?
Balance Sheet and Notes Listed here in random order are Wicks Construction Limiteds balance sheet accounts and related ending balances as of December 31, 2019: Additional information: 1. The company reports on the balance sheet the total amount for inventories and the net book value of property, plant, and equipment, with the related details for each account disclosed in notes. 2. The straight line method is used to depreciate buildings, machinery, and equipment, based upon their cost and estimated residual values and lives. A breakdown of property, plant, and equipment shows the following: land at a cost of 32,000, buildings at a cost of 182,400 and a net book value of 120,200, machinery at a cost of 63,900, and related accumulated depreciation of 18,600, and equipment (40% depreciated) at a cost of 53,000. 3. Patents are amortized on a straight line basis directly to the Patent account. 4. Inventories are listed at the lower of cost or market value using an average cost. The inventories include raw-materials, 22,200; work in process, 34,700; and finished goods, 41,600. 5. Common stock has a 10 par value per share, 12,000 shares are authorized, and 6,280 shares have been issued. 6. Preferred stock has a 100 par value per share, 1,000 shares are authorized, and 400 shares have been issued. 7. The investment in bonds is carried at the original cost, which is the face value, and is being held to maturity. 8. Short-term investments in marketable securities were purchased at year-end. 9. The bonds payable mature on December 31, 2024. 10. The company attaches a 1-year warranty on all the products it sells. Required: 1. Prepare Wicks Constructions December 31, 2019, balance sheet (including appropriate parenthetical notations). 2. Prepare notes to accompany the balance sheet that itemize company accounting policies; inventories; and property, plant, and equipment. 3. Next Level Compute the current ratio and the quick ratio. How do these two ratios provide different information about the companys liquidity? Why are these ratios useful?
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.
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.
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.
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.
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.