Concept explainers
Disposal of property, plant, and equipment; partial periods
• LO11–2
On July 1, 2013, Farm Fresh Industries purchased a specialized delivery truck for $126,000. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $30,000. On March 1, 2018, the truck was sold for $58,000. Farm Fresh uses the
Required:
1. Prepare the
2. Prepare the journal entry to record the sale of the truck.
3. Assuming that the truck was sold for $80,000, prepare the journal entry to record the sale.
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INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
- Required information Exercise 11-1 (Algo) Depreciation methods [LO11-2] [The following information applies to the questions displayed below.] On January 1, 2024, the Excel Delivery Company purchased a delivery van for $35,850. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 109,500 miles. Required: Calculate annual depreciation for the five-year life of the van using each of the following methods. Exercise 11-1 (Algo) Part 3 3. Units of production using miles driven as a measure of output, and the following actual mileage: Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Depreciation Year Miles 2024 23,900 $ 2025 25,900 2026 16,900 2027 29,500 7,170 7,770 5,070 8,850 2028 15,300 Total $ 28,860arrow_forwardUWorld ROGER mos6 as BARRAD Multiple Choice O O X Company had been depreciating a machine with an original cost of $125,000 and a salvage value of $15,000 over its estimated useful life of 10 years using straight line depreciation. At the beginning of the seventh year, X Company determined that the machine will actually remain in use for a total of 12 years and will have a salvage value of $5,000 How much depreciation will X Company recognize in the seventh year? O $9,167 $7,333 $9,000 CPA Review O $10,000 Soved Help Save & Exitarrow_forwardQuestion 15 In January of 1980 DTM purchased a building for $15,000,000 and at that time estimated that the building would have a useful life of 50 years and no residual value. DTM uses the straight line method to depreciate all of its assets. During 2020, the following expenditures were made: 1. On January 1st, 2020 the original siding was replaced with new siding. The old siding cost $1,000,000 and the new siding cost $2,500,000. The new siding is expected to have a useful life of 15 years. 2. On February 6th, 2020 there was $60,000 of uninsured damage to the building caused by severe weather that was repaired. This major repair did not change the estimated useful life of the building or its residual value. 3. The buildings old air filtration system was replaced with a new one on June 22nd, 2020. The new air filtration system cost $800,0000 and it is estimated that it will have a useful life of 10 years. The cost of the old air filtration system is unknown, but it is estimated to be…arrow_forward
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