Connect Access Card For Fundamental Accounting Principles
Connect Access Card For Fundamental Accounting Principles
24th Edition
ISBN: 9781260158526
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 10, Problem 4BTN
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 Value)Estimated life in years 

Requirement-1:

To Calculate:

The annual depreciation expense using the straight line depreciation method

Expert Solution
Check Mark

Answer to Problem 4BTN

The annual depreciation expense using the straight line depreciation method is $10,500

Explanation of Solution

The annual depreciation expense using the straight line depreciation method is calculated as follows;

  Annual Straight line depreciation = (Cost Salvage Value)Estimated life in years 

= (44000-2000)/4

= $10,500

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 Value)Estimated life in years 

Requirement-2:

To indicate:

The recording of the annual depreciation expense using the straight line depreciation method

Expert Solution
Check Mark

Answer to Problem 4BTN

The recording of the annual depreciation expense using the straight line depreciation method is as follows:

Account title         Debit     Credit

Depreciation Expense-Van      $10,500

Accumulated depreciation- Van          $10,500

(Being depreciation expense recorded)

Explanation of Solution

The annual depreciation expense using the straight line depreciation method is calculated as follows;

  Annual Straight line depreciation = (Cost Salvage Value)Estimated life in years 

= (44000-2000)/4

= $10,500

The recording of the annual depreciation expense using the straight line depreciation method is as follows:

Account title        Debit     Credit

Depreciation Expense-Van       $10,500

Accumulated depreciation- Van         $10,500

(Being depreciation expense recorded)

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 Value)Estimated life in years 

Requirement-3:

To indicate:

The impact of the straight line method on the income over the life of the asset

Expert Solution
Check Mark

Answer to Problem 4BTN

Straight line method of depreciation affects the net income equally for each year over the life of the asset.

Explanation of Solution

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 Value)Estimated life in years 

The depreciation expense amount remain same under the Straight line method of depreciation, hence it affects the net income equally for each year over the life of the asset.

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 Value)Estimated life in years 

Requirement-4:

To indicate:

The book value of the asset for each year of its life using the straight line method of the depreciation and reporting for one year

Expert Solution
Check Mark

Answer to Problem 4BTN

The book value of the asset for each year of its life using the straight line method of the depreciation is as follows:

    Year Ending Book value
    1 $ 33,500
    2 $ 23,000
    3 $ 12,500
    4 $2,000

The reporting for the first year in the balance sheet shall be as follows:

Property, Plant and Equipment:

Van

$44,000

Less Accumulated depreciation −Van

-$10,500

Net Book value

$33,500

Explanation of Solution

The book value of the asset for each year of its life using the straight line method of the depreciation is calculated as follows:

    Year Cost of the asset Depreciation expense Accumulated Depreciation Ending Book value
    A B C D =A-C
    1 $ 44,000 $10,500 $ 10,500 $ 33,500
    2 $ 44,000 $10,500 $ 21,000 $ 23,000
    3 $ 44,000 $10,500 $ 31,500 $ 12,500
    4 $ 44,000 $10,500 $ 42,000 $2,000

The reporting for the first year in the balance sheet shall be as follows:

Property, Plant and Equipment:

Van          $44,000

Less Accumulated depreciation −Van    -$10,500

Net Book value           $33,500

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Chapter 10 Solutions

Connect Access Card For Fundamental Accounting Principles

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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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY