Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)
12th Edition
ISBN: 9780134486826
Author: MILLER-NOBLES, Tracie L.; Mattison, Brenda L.; Matsumura, Ella Mae
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 10, Problem E10.20E
Computing
Learning Objective 2
1. Double-declining-balance, 12/31/19, Exp. $8,250
Crispy Fried Chicken bought equipment on January 2, 2018, for $33,000. The equipment was expected to remain in service for four years and to operate for 6,750 hours. At the end of the equipment’s useful life, Crispy’s estimates that its residual value will be $6,000. The equipment operated for 675 hours the first year, 2,025 hours the second year, 2,700 hours the third year, and 1,350 hours the fourth year.
Requirements
- Prepare a schedule of depreciation expense,
accumulated depreciation , ad book value per year for the equipment under the three depreciation methods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared. - Which method tracks the wear and tear on the equipment most closely?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
E9-20 Computing depreciation-three methods
Learning Objective 2
1. Double-declining-balance, 12/31/19, Exp. $8,250
Crispy Fried Chicken bought equipment on January 2, 2018, for $33,000. The
equipment was expected to remain in service for four years and to operate for
6,750 hours. At the end of the equipment's useful life, Crispy's estimates that its
residual value will be $6,000. The equipment operated for 675 hours the first
year, 2,025 hours the second year, 2,700 hours the third year, and 1,350 hours the
fourth year.
Requirements
1. Prepare a schedule of depreciation expense, accumulated depreciation,
and book value per year for the equipment under the three depreciation
methods: straight-line, units-of-production, and double-declining-balance.
Show your computations. Note: Three depreciation schedules must be
prepared.
2. Which method tracks the wear and tear on the equipment most closely?
E10-20 Computing depreciation three methods
Learning Objective 2
1. Double-declining-balance, 12/31/17, Exp. $5,250
(Requirement 1 only)
Crackling Fried Chicken bought equipment on January 2, 2016, for $21,000. The equipment
was expected to remain in service for four years and to perform 3,600 fry jobs. At the end of
the equipment's useful life, Crackling's estimates that its residual value will be $3,000. The
equipment performed 360 jobs the first year, 1,080 the second year, 1,440 the third, and 720
the fourth year.
Requirements
1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per
year for the equipment under the three depreciation methods. Show your computations.
Note: Three depreciation schedules must be prepared.
2. Which method tracks the wear and tear on the equipment most closely?
FINANCIAL ACCOUNTING
DEPRECIATION YEAR TWO
EXAM CHAPTER 7-9
DEPRECIABLE BASE
COST
Student Name:
SALVAGE VALUE
TYPE NAME HERE
USEFUL LIFE
SRTAIGHT LINE RATE
OPERATING HOURS TOTAL
COMPUTE YEAR TWO I HAVE COMPUTED YEAR ONE FOR YOU
CURRENT OPERATING HOURS
DOUBLE DECLINING RATE
Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of 5 years, or
14,000 operating hours, and a residual value of $10,000. Compute the depreciation for the first and second years
of use by each of the following methods:
DEPRECIATION EXPENSE
UNIT OF PRODUCTION RATE
straight-line
units-of-output (1,200 hours first year; 2,250 hours second year)
double-declining-balance
YEAR ONE
YEAR TWO
DOUBLE
DOUBLE
STRAIGHT
UNITS OF
DECLINING
STRAIGHT
UNITS OF
DECLINING
LINE
PRODUCTION
BALANCE
LINE
PRODUCTION
BALANCE
Chapter 10 Solutions
Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)
Ch. 10 - Prob. 1QCCh. 10 - Prob. 2QCCh. 10 - Which method almost always produces the most...Ch. 10 - A Celty Airline jet costs $28,000,000 and expected...Ch. 10 - Prob. 5QCCh. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Prob. 8QCCh. 10 - Prob. 9QCCh. 10 - Prob. 10AQC
Ch. 10 - Prob. 1RQCh. 10 - Plant assets are recorded at historical cost. What...Ch. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - What is depreciation? Define useful life, residual...Ch. 10 - Which depreciation method ignores residual value...Ch. 10 - How does a business decide which depreciation...Ch. 10 - What is the depreciation method that is used for a...Ch. 10 - If a business changes the estimated useful life or...Ch. 10 - Prob. 12RQCh. 10 - How is discarding of a plant asset different from...Ch. 10 - How is gain or loss determined when disposing of...Ch. 10 - Prob. 15RQCh. 10 - Prob. 16RQCh. 10 - Prob. 17RQCh. 10 - Prob. 18RQCh. 10 - Prob. 19RQCh. 10 - What does it mean if an exchange of plant assets...Ch. 10 - Determining the cost of an asset Learning...Ch. 10 - Making a lump-sum asset purchase Learning...Ch. 10 - Prob. S10.3SECh. 10 - Prob. S10.4SECh. 10 - Prob. S10.5SECh. 10 - Prob. S10.6SECh. 10 - Prob. S10.7SECh. 10 - Prob. S10.8SECh. 10 - Prob. S10.9SECh. 10 - Prob. S10.10SECh. 10 - Prob. S10.11SECh. 10 - Prob. S10.12SECh. 10 - Prob. S10.13SECh. 10 - Prob. S10.14SECh. 10 - Prob. S10A.15SECh. 10 - Prob. S10A.16SECh. 10 - Prob. E10.17ECh. 10 - Making a lump-sum purchase of assets Learning...Ch. 10 - Prob. E10.19ECh. 10 - Computing depreciationthree methods Learning...Ch. 10 - Prob. E10.21ECh. 10 - Prob. E10.22ECh. 10 - E10-23 Recoding partial-year depreciation and sale...Ch. 10 - Prob. E10.24ECh. 10 - Prob. E10.25ECh. 10 - Measuring and recording goodwill Learning...Ch. 10 - Computing asset turnover ratio Learning Objective...Ch. 10 - Prob. E10.28AECh. 10 - Prob. E10.29AECh. 10 - Determining asset cost and recoding partial-year...Ch. 10 - Determining asset cost, preparing depreciation...Ch. 10 - Prob. P10.32APGACh. 10 - Prob. P10.33APGACh. 10 - Prob. P10.34APGACh. 10 - Prob. P10A.35APGACh. 10 - Determining asset cost and recording partial-year...Ch. 10 - Prob. P10.37BPGBCh. 10 - P10-38B Recording lump-sum asset purchases,...Ch. 10 - Prob. P10.39BPGBCh. 10 - Prob. P10.40BPGBCh. 10 - Prob. P10A.41BPGBCh. 10 - P10-42 Using Excel to prepare depreciation...Ch. 10 - Prob. P10.43CPCh. 10 - Comprehensive Problem for Chapters 8, 9, and 10...Ch. 10 - Comprehensive Problem for Chapters 8, 9, and 10...Ch. 10 - Prob. 3CPCh. 10 - Prob. 4CPCh. 10 - Prob. 5CPCh. 10 - Prob. 6CPCh. 10 - Prob. 7CPCh. 10 - Prob. 8CPCh. 10 - McDonald’s Corporation is the world’s leading...Ch. 10 - Prob. 10.1EICh. 10 - Prob. 10.1FCCh. 10 - Prob. 10.1FSC
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
- Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] NewTech purchases computer equipment for $257,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $24,00O. Exercise 8-8 Double-declining-balance depreciation LO P1 Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. (Enter all amounts positive values.) Depreciation for the Period End of Periodarrow_forwardCengageNOWv2 | Online teaching and learning resource from Cengage Learning Calculator Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $612,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $44,360. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain(loss) on the sale of the equipment, assuming it was sold at the end of year eight for $102,987. Round your answer to the nearest cent and enter as a positive amount. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent. Previous Next> Email Instructor Submit Test for Grading All work saved.arrow_forwardStudent question Time Left : 00:09:30 A company purchased factory equipment on June 1,2021 , for $151000. It is estimated that the equipment will have a $8200 salvage value at the end of its 10 -year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2021, is $8330. $14280. $5950. $7140arrow_forward
- Saved Help Save & EX Assignment O Check Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] On April 1, Cyclone Company purchases a trencher for $314,000. The machine is expected to last five years and have a salvage value of $57,000. Exercise 8-12 (Algo) Double-declining-balance, partial-year depreciation LO C2 55 Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the double- declining-balance method. (Enter all amounts as positive values.) Depreciation for the Period End of Period Annual Period Beginning of Depreciation Period Book Partial Year Depreciation Accumulated Expense Book Value Rate Depreciation Value nces Year 1 Year 2 ere to search 77°F A a hp 40 144 41 20 prt sc delete 1 & 5 8. R. Y. H. pausearrow_forwardE9-22 Recording partial-year depreciation and sale of an asset Learning Objectives 2, 3 Depr. Exp. $3,400 On January 2, 2017, Comfy Clothing Consignments purchased showroom fixtures for $17,000 cash, expecting the fixtures to remain in service for five years. Comfy has depreciated the fixtures on a double-declining-balance basis, with zero residual value. On October 31, 2018, Comfy sold the fixtures for $7,600 cash. Record both depreciation expense for 2018 and sale of the fixtures on October 31, 2018.arrow_forwardRequired information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below] NewTech purchases computer equipment for $261,000 to use in operating activities for the next four years at estimates the equipment's salvage value at $30,000. Exercise 8-8 (Algo) Double-declining-balance depreciation LO P1 Prepare a table showing depreciation and book value for each of the four years assuming double-declining balance depreciation, Note: Enter all amounts as positive values. Year Year 1 Year 2 Year 3 Year 4 Total Depreciation for the Period Beginning-Year Depreciation - Book Value Rate Annual thepreciation 3 End of Period Accumulated Depreciation Year-End Book Valusarrow_forward
- (Learning Objectives 3, 4: Measure DDB depreciation; analyze the effect of a saleof a plant asset) On January 2, 2018, Drake Furnishings purchased display shelving for $8,100cash, expecting the shelving to remain in service for five years. Drake depreciated the shelvingon a double-declining-balance basis, with $1,300 estimated residual value. On September 30,2019, the company sold the shelving for $2,400 cash. Record both the depreciation expense onthe shelving for 2019 and its sale in September. Also show how to compute the gain or loss onthe disposal of the shelvingarrow_forwardS9-8 Discarding an asset Learning Objective 3 On October 31, 2018, Alternative Landscapes discarded equipment that had a cost of $26,920. Accumulated Depreciation as of December 31, 2017, was $25,000. Assume annual depreciation on the equipment is $1,920. Journalize the partial-year depreciation expense and disposal of the equipment.arrow_forward(Learning Objective 3: Compute depreciation and book value by three methods—firstyear only) On January 1, 2017, Northeast Transportation Company purchased a used aircraftat a cost of $58,900,000. Northeast expects the plane to remain useful for five years(7,200,000 miles) and to have a residual value of $4,900,000. Northeast expects to fly the plane750,000 miles the first year, 1,375,000 miles each year during the second, third, and fourthyears, and 2,325,000 miles the last year.1. Compute Northeast’s depreciation for the first two years on the plane using the followingmethods:a. Straight-line methodb. Units-of-production method (round depreciation per mile to the closest cent)c. Double-declining-balance method2. Show the airplane’s book value at the end of the first year under each depreciation method.arrow_forward
- (Learning Objectives 3, 4: Measure DDB depreciation; analyze the effect of a saleof a plant asset) On January 2, 2018, Ellet Furniture purchased display shelving for $8,900cash, expecting the shelving to remain in service for five years. Ellet depreciated the shelvingon a double-declining-balance basis, with $1,100 estimated residual value. On August 31, 2019,the company sold the shelving for $2,800 cash. Record both the depreciation expense on theshelving for 2019 and its sale in August. Also show how to compute the gain or loss on thedisposal of the shelving.arrow_forward(Learning Objective 3: Determine depreciation amounts by three methods) LimaPizza bought a used Toyota delivery van on January 2, 2018, for $18,600. The van wasexpected to remain in service for four years (57,000 miles). At the end of its useful life, Limamanagement estimated that the van’s residual value would be $1,500. The van traveled 20,500miles the first year, 16,000 miles the second year, 15,400 miles the third year, and 5,100 milesin the fourth year.Requirements1. Prepare a schedule of depreciation expense per year for the van under the three depreciationmethods discussed in this chapter. (For units-of-production and double-declining-balancemethods, round to the nearest two decimal places after each step of the calculation.)2. Which method best tracks the wear and tear on the van?3. Which method would Lima prefer to use for income tax purposes? Explain your reasoningin detail.arrow_forwardRequired information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] NewTech purchases computer equipment for $261,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $30,000. Exercise 8-7 (Algo) Straight-line depreciation LO P1 Prepare a table showing depreciation and book value for each of the four years assuming straight-line depreciation. Choose Numerator: Year Year 1 Year 2 Year 3 Year 4 Total Straight-Line Depreciation Choose Denominator: Annual Depreciation = = Annual Depreciation Expense Depreciation expense Year-End Book Valuearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
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