X company purchased 3 trucks on January 1,2019 as following: Useful life Salvage Value Depreciation Method Cost $20000 Double Declining (DDM) Truck 1 Truck 2 $25000 $5000 Straight Line (SLM) Truck 3 $30000 $0 Units of Activity (UAM) Book Value (BV) in year 3 for Truck 2? Answer: 5.
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A: Solution: Under units-of-activity method of computing depreciation, depreciation based is divided by…
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A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: Robert Sporting Goods Company had purchased some equipment (Q107) on January 1, 2014 for $104 000…
A: Equipment (Q107) $ Cost $1,04,000 Less: Salvage Value $ 8,000 Depreciable Base $…
Q: Swifty Corporation purchased machinery that was installed and ready for use on January 3, 2020, at a…
A: Step 1 Double-declining rate = 2 × Straight-line depreciation rate The double declining balance…
Q: Riverbed Company purchased a delivery truck for $33,000 on January 1, 2020. The truck has an…
A: Answer) Calculation of depreciation expense for the year 2020 and 2021 if the company uses Straight…
Q: Freedom Co. purchased a new machine on July 2, 2019, at a total installed cost of $132,000. The…
A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…
Q: Bataan Company purchased a machinery that was installed and ready for use on January 1, 2019 at a…
A: Depreciation is an expense which is recorded in the income statement of the firm. There are various…
Q: Sandhill Co. purchased a new machine on October 1, 2022, at a cost of $80,010. The company estimated…
A: Straight-line depreciation method: The depreciation method which assumes that the consumption of…
Q: Equipment was purchased for $150,000 on July 1, 2020. Freight charges amounted to $7,000 and there…
A: Calculation of depreciation under straight-line method:
Q: Pearson Company bought a machine on July 1, 2022. The machine cost $180,000 and had an expected…
A: Depreciation refers to the amount of permanent loss in the value of an asset. It is reduction in the…
Q: Bautista Organizers purchased an equipment costing P50,000 on July 1, 2018. The equipment has an…
A: Accumulated depreciation refers to the total deprecation charges till a particular point. This can…
Q: Tamarisk Company purchased a machine on January 2, 2020, for $725,400. The machine has an estimated…
A:
Q: A company purchased a truck for $35,000 on January 1, 2019. The truck is estimated to have a useful…
A: The straight-line method of depreciation is the simplest method of calculating depreciation.
Q: On January 1, 2020, ER Corp. purchased a truck for $100,000, with an estimated useful life of 8…
A: Depreciation rate as per double declining balance method = 2/useful life
Q: N company purchased a compilation system on jan 1, 2019 at a cash cost of $25,000. The estimated…
A: Solution:- Calculation depreciation using double declining balance depreciation method as follows:-…
Q: Hidd Company purchased an equipment costing $72,000 on July 1, 2021. The straight-line depreciation…
A: Introduction:- Depreciation is the expense, which is charged on the asset over useful life of the…
Q: Company B purchased equipment for 110,000 on 1/1/2020. The equipment has a useful life of 5 years…
A: Depreciation expense is part of cost of the asset charged as expense in the income statement.…
Q: Concord Company purchased a delivery truck for $29,000 on January 1, 2022. The truck has an expected…
A: Depreciation is charged against the value of fixed assets. It can be calculated by using the…
Q: Company D purchased equipment for 110,000 on 1/1/2020. The equipment has a useful life of 4 years…
A: Fixed assets: These are the assets which were used in the business for more than one year. These…
Q: On January 2, 2018 Careful Corporation purchased security equipment for $44,000 cash. The equipment…
A: From January 2, 2018 to December 31, 2020 = 3 years Annual depreciation = ($44,000 - $4,000) / 8…
Q: On January 1, 2015, Minco Coportation purchased, for $100,000, equipment having a useful life of the…
A: Depreciation = Total Cost of Equipment - Salvage ValueUseful life
Q: a) Prepare a table that shows depreciation expense of each year over the machine’s useful life b)…
A: The double declining balance depreciation method is a form of accelerated depreciation that doubles…
Q: ABC Co. purchased machinery that was installed and ready for use on January 3, 2020, at a total cost…
A: Solution: Depreciation rate - SLM = 1/5 = 20% Depreciation rate- DDB = 20%*2 = 40% Cost of machine =…
Q: Oriole Company purchased a delivery truck for $42,000 on January 1, 2022. The truck has an expected…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: Robert Sporting Goods Company had purchased some equipment (Q107) on January 1, 2014 for $104 000…
A: •Cost = $104,000 •Salvage value = $8,000 •Depreciable base : 104,000 - 8000 = $96,000
Q: Swifty Corporation purchased a delivery truck for $28,000 on January 1, 2020. The truck has an…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: Chandler Company purchased a factory machinery on May 1, 2030 for $133,500 with an estimated 5- year…
A: Depreciation will be charged for only 8 months of usage in the Year 2030
Q: eanut Company purchased a machine on January 1, 2019, for $100,000 with a $20,000 salvage value and…
A: Depreciation (Double Declining Method) = 1/ no. of Useful life x 100 = 1/ 8 years x 100 = 12.5%…
Q: Prepare journal entries to record the following events:
A: Requirement 1: Pass necessary journal entries.
Q: What is the depreciation for 2020 using straight line depreciation? A. P150,000 B. P101,250 C.…
A: Cost of Machinery = P1200000 Salvage Value = P120000 Useful Life = 8 Years Annual Depreciation…
Q: Robert Sporting Goods Company had purchased some equipment (Q107) on January 1, 2014 for $104 000…
A: Depreciable base = Cost - Salvage value Annual depreciation charge = Depreciable base/Useful life…
Q: n July 1, 2020 Waterway's Greenhouse purchased a new delivery truck for $100,000. Waterway estimates…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: Linton Company purchased a delivery truck for $34,000 on January 1, 2022. The truck has an expected…
A: 1. Determine the depreciation expense for 2022 and 2023: Cost of truck $34,000 Less: Expected…
Q: Equipment was purchased for $86200 on January 1, 2021. Freight charges amounted to $2800 and there…
A: Cost of asset=Purchase price+Freight+Installation=$86,200+$2,800+$12,000=$101,000
Q: A company purchased a piece of equipment for $30,000 on May 1, 2019. Management estimates a salvage…
A: Depreciation expense is part of cost of the asset charged as expense in the income statement.…
Q: Illustration: Barb's Florists purchased a small delivery truck on January 1, 2020. Cost $13,000…
A: The fall in the assets worth due to regular usage, wear and tear is known as depreciation.
Q: RS Inc. acquired a delivery truck for P2,100,000 on January 1, 2018. The delivery truck has useful…
A: 1. Sum of useful life = 5+4+3+2+1 = 15 2. Calculation of depreciation rate for each year under sum…
Q: Cheyenne Corp. purchased a delivery truck for $42,000 on January 1, 2022. The truck has an expected…
A: Depreciation expense refers to the amount needs to be deducted from the gross profit of a company in…
Q: the depreciation expense for 2021 will be
A: Double declining balance method is one of the accelerated methods used for the calculation of the…
Q: Equipment was purchased for $83700 on January 1, 2021. Freight charges amounted to $4000 and there…
A: Accumulated Depreciation: It is the total of the depreciation expense written off each year since…
Q: ORCHID Company purchased machinery on January 1, 2020. It has an estimated useful life of four years…
A: Depreciation is the allocation of cost of asset over the useful life of the asset.
Q: On May 1, 2021, Bramble Company sells office furniture for $ 297600 cash. The office furniture…
A: Annual depreciation under straight lime method = (cost - salvage value)/useful life =…
Q: Equipment was purchased for $150,000 on July 1, 2020. Freight charges amounted to $7,000 and there…
A: Since the asset has been put to use on Oct 1, so for 2020, depreciation for only 3 months needs to…
Q: On July 1, 2021, Hale Kennels sells equipment for $222000. The equipment originally cost $594000,…
A: Annual depreciation = (Cost - salvage value)/useful life = (594,000 - 109,000)/5…
Q: Equipment was purchased for $86200 on January 1, 2021. Freight charges amounted to $2800 and there…
A: First we need to find capitalized cost of asset Then depreciable value of asset is to be found…
Q: Swifty Corporation purchased a truck at the beginning of 2020 for $109600. The truck is estimated to…
A: Units of activity method: Under units-of-activity method, depreciation is computed based on the…
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- 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.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. $134,000Hathaway 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?
- 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.Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of 20,000. Required: Compute the depreciation expense for 2019 under each of the following methods: 1. straight-line 2. sum-of-the-years-digits 3. double-declining-balance 4. Next Level What effect does the depreciation of the equipment have on the analysis of rate of return?Bruce Company acquired a machinery on April 1, 2020. Cost P 1,200,000 Residual Value P 120,000 Estimated Useful Life 8 years What is the depreciation for 2020 using straight line depreciation? A. P150,000 B. P101,250 C. P112,500 D. P125,000 What is the carrying amount of the machinery on December 31, 2022 using straight line depreciation? A. P750,000 B. P817,500 C. P828,750 D. P780,000
- Vehicles R300 000, Accumulated depreciation R50 000. Depreciation is calculated at 10%on cost. An old vehicle was disposed on 31 August 2019 at R20 000 cash.The vehicle originally costed R25 000 and the Accumulated depreciation is R 3 000.Depreciation for the disposed vehicle is________.A. R2 500B. R1 250C. R2 000D. R500D E F G Depreciation for Partial Periods Norman Delivery Company purchased a new delivery truck on April 1, 2019. Norman computes depreciation expense to the nearest whole month. DATA Truck purchasing cost A B $37,000 Truck's expected service life, years 5 Truck's expected service life, miles 170,000 Truck's residual value $3,000 Miles driven in 2019 10,000 16,000 Miles driven in 2020 REQUIRED: 1 Compute depreciation expense for 2019 and 2020 using the following methods: a. b. C. d. Straight-line method Sum-of-the-years'-digits method Double-declining-balance method Activity method 2 For each method, what is the book value of the machine at the end of 2019? At the end of 2020? H J K L Σ N OBruce Company acquired a machinery on April 1, 2020. Cost P 1,200,000 Residual Value P 120,000 Estimated Useful Life 8 years What is the depreciation for 2020 using double declining balance? A. P300,000 B. P150,000 C. P225,000 D. P202,500 What is the depreciation for 2021 using double declining balance? A. P270,000 B. P135,000 C. P243,750 D. P150,000
- Bruce Company acquired a machinery on April 1, 2020. Cost P 1,200,000 Residual Value P 120,000 Estimated Useful Life 8 years What is the depreciation for 2020 using sum of years’ digits? A. P240,000 B. P180,000 C. P120,000 D. P160,000 What is the depreciation for 2021 using sum of years’ digits? A. P157,500 B. P217,500 C. P210,000 D. P105,000Survive, Inc.’s property, plant and equipment at December 31, 2019: P R T C Original cost P175,000 P255,000 P400,000 P400,000 Year Purchased 2014 2015 2016 2018 Useful life 10 years 75,000 hours 15 years 10 years Salvage value P15,500 P15,000 P25,000 P25,000 Depreciation method SYD Activity Straight-line Double-declining balance Note: In the year an asset is purchased, Survive, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Survive, Inc. takes full year depreciation on the asset The following transaction occurred during 2020: 1. On May 5, Asset P was sold for P65,000 cash. 2. Asset R was used for 10,500 hours during 2020. Accumulated usage as of December 31, 2019 is 40,800 hours. 3. On December 31, before computing depreciation expense on Asset T, the management of Survive, Inc. determined that the useful life remaining from January 1, 2020 is only 10 years. 4. On December 31, it was discovered that a plant…Presented below is information related to equipment owned by Camel Company Q3- at December 31, 2021. Cost Accumulated depreciation to date Value-in-use Fair value less cost of disposal BD6,000,000 900,000 4,000,000 3,200,000 Assume that Camel company will continue to use this asset in the future. As of December 31, 2021, the equipment has a remaining useful life of 5 years. Required: Based on the above data use your advance skills to; a. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2021. b. Prepare the journal entry to record depreciation expense for 2022. C. The recoverable amount of the equipment at December 31, 2022, is BD4,250,000. Prepare the journal entry (if any) necessary to record this increase.
