FUNDAMENTAL ACCT PRIN CONNECT ACCESS
FUNDAMENTAL ACCT PRIN CONNECT ACCESS
24th Edition
ISBN: 9781266494604
Author: Wild
Publisher: MCG
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Chapter 10, Problem 10SP
To determine

Concept Introduction:

Straight line method of depreciation:

This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset it divided equally for each year f its estimated life. The formula to calculate the deprecation under straight line method is as follows:

  Annual Straight line depreciation = Cost Salvage ValueEstimated life in years 

Requirement-1:

To Calculate:

The amount of depreciation expenses for the year 2020

Expert Solution
Check Mark

Answer to Problem 10SP

The amount of depreciation expenses for the year 2020 are as follows:

    Depreciation Expense- Office Equipment for the year 2020 $ 400
    Depreciation Expense- Computer Equipment for the year 2020 $ 1,250

Explanation of Solution

The amount of depreciation expenses for the year 2020 are calculated as follows:

    Accumulated Depreciation- Office Equipment as on Dec. 31, 2019 (A) $ 400
    Accumulated Depreciation- Office Equipment as on Dec. 31, 2020 (B) $ 800
    Depreciation Expense- Office Equipment for the year 2020 (B-A)$ 400
    Accumulated Depreciation- Computer Equipment as on Dec. 31, 2019 (A) $ 1,250
    Accumulated Depreciation- Computer Equipment as on Dec. 31, 2020 (B) $ 2,500
    Depreciation Expense- Computer Equipment for the year 2020 (B-A)$ 1,250
To determine

Concept Introduction:

Straight line method of depreciation:

This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset it divided equally for each year f its estimated life. The formula to calculate the deprecation under straight line method is as follows:

  Annual Straight line depreciation = Cost Salvage ValueEstimated life in years 

Requirement-2:

To Calculate:

The book value of the assets as on Dec. 31, 2020

Expert Solution
Check Mark

Answer to Problem 10SP

The book value of the assets as on Dec. 31, 2020 is as follows:

    Book value of Office Equipment as on Dec. 31, 2020 $ 7,200
    Book value of Computer Equipment as on Dec. 31, 2020 $ 17,500

Explanation of Solution

The book value of the assets as on Dec. 31, 2020 is calculated as follows:

    Office Equipment (A) $ 8,000
    Accumulated Depreciation- Office Equipment as on Dec. 31, 2020 (B) $ 800
    Book value of Office Equipment as on Dec. 31, 2020 (B-A)$ 7,200
    Computer Equipment (A) $ 20,000
    Accumulated Depreciation- Computer Equipment as on Dec. 31, 2020 (B) $ 2,500
    Book value of Computer Equipment as on Dec. 31, 2020 (B-A)$ 17,500
To determine

Concept Introduction:

Straight line method of depreciation:

This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset it divided equally for each year f its estimated life. The formula to calculate the deprecation under straight line method is as follows:

  Annual Straight line depreciation = Cost Salvage ValueEstimated life in years 

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

  Asset Turnover Ratio = SalesAverage total assets 

Requirement-3:

To Calculate:

The Asset turnover ratio for the period of three months

Expert Solution
Check Mark

Answer to Problem 10SP

The Asset turnover ratio for the period of three months shall be 0.43 which below the industry average.

Explanation of Solution

The Asset turnover ratio for the period of three months is calculated as follows:

    Net Sales (A) $ 44,000
    Beginning Total Assets (B) $ 83,460
    Ending Total Assets (C) $ 120,265
    Average Total Assets (D) = (A+B)/2 = $ 101,863
    Total Asset Turnover (A/B) 0.43

Total Asset Turnover for three months period is 0.43, hence one year Total Asset Turnover shall be 0.43*12/3 = 1.72

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Chapter 10 Solutions

FUNDAMENTAL ACCT PRIN CONNECT ACCESS

Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Cost of plant assets C1 Kegler Bowling installs...Ch. 10 - Assigning costs to plant assets C1 Q Listed below...Ch. 10 - Straight-line depreciation P1 On January 1= the...Ch. 10 - QS 10-' Units-of-production depreciation On...Ch. 10 - QS10-5 Double-declining-balance method P1 A...Ch. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Revenue and capital expenditures C3 1. Classify...Ch. 10 - Prob. 10QSCh. 10 - Natural resources and depletion P3 Perez Company...Ch. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Exercise 10-1 Cost of plant assets C1 Q Rizio Co....Ch. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Exercise 104 Straight-line depreciation P1 Ramirez...Ch. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6 Double-declining-balance...Ch. 10 - Exercise 10-7 Straight-line depreciation P1 New...Ch. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Exercise 10-9 Straight-line depreciation and...Ch. 10 - Exercise 10-10 Double-declining-balance...Ch. 10 - Exercise 10-11 Straight-line, partial-year...Ch. 10 - Exercise 10-12 Dauble-declining-balance....Ch. 10 - Exercise 10-13 Revising depreciation C2 Apex...Ch. 10 - Exercise 10-14 Ordinary repairs, extraordinary...Ch. 10 - Exercise 10.15 Extraordinary repairs; plant asset...Ch. 10 - Exercise 10-16 Disposal of assets P2 Diaz Company...Ch. 10 - Exercise 10-17 Partial-year depreciation: disposal...Ch. 10 - Exercise 10-18 Depletion of natural resources P3...Ch. 10 - Exercise 10-19 Amortization of intangible assets...Ch. 10 - Exercise 10-20 Goodwill P4 Robinson Company...Ch. 10 - Exercise 10-21 Preparing a balance sheet P1 P3...Ch. 10 - Exercise 10-22 Evaluating efficient use of assets...Ch. 10 - Exercise 10-23A Exchanging assets P5 Gilly...Ch. 10 - Prob. 24ECh. 10 - Problem 10-1A Plant asset costs; depreciation...Ch. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Problem 10-3A Asset cost allocation; straight-line...Ch. 10 - Problem 10-4A Computing and revising depreciation;...Ch. 10 - Problem 10-5A Computing and revising depreciation;...Ch. 10 - Problem 1O-6A Disposal of plant assets C1 P1...Ch. 10 - Problem 1O7A Natural resources P3 On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Problem 10-1B Plant asset costs; depreciation...Ch. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Problem 10-3B Asset cost allocation; straight-line...Ch. 10 - Prob. 4BPSBCh. 10 - Problem 10-5B Computing and revising...Ch. 10 - Problem 1O-6B Disposal of plant assets C1 P1 P2 On...Ch. 10 - Prob. 7BPSBCh. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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