INTERMEDIATE ACCTING CONNECT ACCESS >I<
9th Edition
ISBN: 9781260586893
Author: SPICELAND
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Chapter 11, Problem 11.13E
Group
• LO11–2
Highsmith Rental Company purchased an apartment building early in 2018. There are 20 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available:
In 2021, three new refrigerators costing $2,700 were purchased for cash. The old refrigerators, which originally cost $1,500, were sold for $200.
Required:
1. Calculate the group depreciation rate, group life, and depreciation for 2018.
2. Prepare the
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company's actual use of the RV (at customer events):
20X2
20X3
20X4
20X5
20X6
Total
Actual Hours of Use
Per Year
250
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440
380
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Testbank Multiple Choice Question 65
On February 1, 2020, Waterway Industries purchased a parcel of land as a factory site for $310000. An old building on the property was demolished, and construction began on a new building which
was completed on November 1, 2020. Costs incurred during this period are listed below:
Demolition of old building
$ 20700
Architect's fees
34700
Legal fees for title investigation and purchase contract
4500
Construction costs
1378000
(Salvaged materials resulting from demolition were sold for $8600.)
Waterway should record the cost of the land and new building, respectively, as
O $322100 and $1417200.
O $322100 and $1412700.
O $326600 and $1412700.
O $335200 and $1404100.
Asset
Office furniture
Machinery
Used delivery truck*
*Not considered a luxury automobile.
During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to
increase its production capacity. These are the assets acquired during 2023:
Cost
$ 190,000
1,600,000
48,000
Description
2022 Assets
Office furniture
Machinery
Used delivery truck
2023 Assets
Asset
Computers and information system
Luxury auto*
Assembly equipment
Storage building
*Used 100% for business purposes.
Karane generated taxable income in 2023 of $1,742,500 for purposes of computing the §179 expense limitation. (Use
MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.)
Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
vate Placed in
Service
02/03/2022
07/22/2022
08/17/2022
Required:
b. Compute the maximum 2023 depreciation…
Chapter 11 Solutions
INTERMEDIATE ACCTING CONNECT ACCESS >I<
Ch. 11 - Prob. 11.1QCh. 11 - Depreciation is a process of cost allocation, not...Ch. 11 - Identify and define the three characteristics of...Ch. 11 - Discuss the factors that influence the estimation...Ch. 11 - What is meant by depreciable base? How is it...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - Why are time-based depreciation methods used more...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Briefly explain the differences and similarities...Ch. 11 - Prob. 11.12QCh. 11 - Prob. 11.13QCh. 11 - What are some of the simplifying conventions a...Ch. 11 - Explain the accounting treatment required when a...Ch. 11 - Explain the accounting treatment and disclosures...Ch. 11 - Explain the steps required to correct an error in...Ch. 11 - Prob. 11.18QCh. 11 - Prob. 11.19QCh. 11 - Prob. 11.20QCh. 11 - Prob. 11.21QCh. 11 - Briefly explain the differences between U.S. GAAP...Ch. 11 - Under U.S. GAAP, litigation costs to successfully...Ch. 11 - Cost allocation At the beginning of its fiscal...Ch. 11 - Depreciation methods LO112 On January 1, 2018,...Ch. 11 - Depreciation methods; partial periods LO112 Refer...Ch. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Group depreciation; disposal LO112 Mondale Winery...Ch. 11 - Prob. 11.8BECh. 11 - Prob. 11.9BECh. 11 - Prob. 11.10BECh. 11 - Change in principle; change in depreciation method...Ch. 11 - Prob. 11.12BECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.14BECh. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.16BECh. 11 - Prob. 11.17BECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Subsequent expenditures LO119 Demmert...Ch. 11 - Depreciation methods LO112 On January 1, 2018,...Ch. 11 - Prob. 11.2ECh. 11 - Depreciation methods; partial periods LO112 [This...Ch. 11 - Depreciation methods; asset addition; partial...Ch. 11 - Depreciation methods; solving for unknowns LO112...Ch. 11 - Depreciation methods; partial periods LO112 On...Ch. 11 - Prob. 11.7ECh. 11 - IFRS; depreciation; partial periods LO112, LO1110...Ch. 11 - IFRS; revaluation of machinery; depreciation;...Ch. 11 - Disposal of property, plant, and equipment LO112...Ch. 11 - Disposal of property, plant, and equipment;...Ch. 11 - Depreciation methods; disposal; partial periods ...Ch. 11 - Group depreciation LO112 Highsmith Rental Company...Ch. 11 - Double-declining-balance method; switch to...Ch. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Cost of a natural resource; depletion and...Ch. 11 - Prob. 11.18ECh. 11 - Prob. 11.19ECh. 11 - Prob. 11.20ECh. 11 - Prob. 11.21ECh. 11 - Change in estimate; useful life and residual value...Ch. 11 - Change in principle; change in depreciation...Ch. 11 - Change in principle; change in depreciation...Ch. 11 - Prob. 11.25ECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - IFRS; Impairment; property, plant, and equipment ...Ch. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.30ECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Prob. 11.32ECh. 11 - FASB codification research LO118 The FASB...Ch. 11 - Prob. 11.34ECh. 11 - Subsequent expenditures LO119 Belltone Company...Ch. 11 - Prob. 11.36ECh. 11 - Concept s; terminology LO111 through LO116, LO118...Ch. 11 - Retirement and replacement depreciation Appendix...Ch. 11 - Depreciation methods; change in methods LO112,...Ch. 11 - Prob. 11.2PCh. 11 - Depreciation methods; partial periods Chapters 10...Ch. 11 - Partial- year depreciation; asset addition;...Ch. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.8PCh. 11 - Straight-line depreciation; disposal; partial...Ch. 11 - Prob. 11.10PCh. 11 - Prob. 11.11PCh. 11 - Prob. 11.12PCh. 11 - Depreciation and depletion; change in useful life;...Ch. 11 - Analysis Case 111 Depreciation, depletion, and...Ch. 11 - Communication Case 112 Depreciation LO111 At a...Ch. 11 - Judgment Case 113 Straight-line method; composite...Ch. 11 - Prob. 11.4BYPCh. 11 - Prob. 11.5BYPCh. 11 - Prob. 11.7BYPCh. 11 - Prob. 11.8BYPCh. 11 - Research Case 119 FASB codification; locate and...Ch. 11 - Ethics Case 1110 Asset impairment LO118 At the...Ch. 11 - Prob. 11.11BYPCh. 11 - Prob. 11.13BYPCh. 11 - Real World Case 1114 Disposition and depreciation;...Ch. 11 - Real World Case 1115 Depreciation and depletion...Ch. 11 - Prob. 11.16BYPCh. 11 - Target Case LO112, LO118, LO119 Target...
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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
- View Policies Current Attempt in Progress Teal Mountain Inc. purchased a tractor trailer for $152000. Teal Mountain uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1000000 miles over its 12-year useful life. Salvage value is estimated to be $16000. If the truck is driven 76000 miles in its first year, how much depreciation expense should Teal Mountain record? O $11721. O $10336. O $11552. O $9589. Save for Later Attempts: 0 of 1 used Submit Answerarrow_forwardProblem 8-33 (LO. 2) Debra acquired the following new assets during 2020: Date Asset Cost April 11 Furniture $40,000 July 28 Trucks 40,000 November 3 Computers 70,000 Debra does not elect immediate expensing under § 179. She does not claim any available additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the depreciation tables to use for this problem. c. The cost recovery deductions for the current year is: Furniture: $fill in the blank 5 Trucks: $fill in the blank 6 Computers: $fill in the blank 7 Exhibit 8.4 MACRS Accelerated Depreciation for Personal Property Assuming Mid-Quarter Convention (Percentage Rates) For Property Placed in Service after December 31, 1986 (Partial Table) 3-Year Recovery Year First Quarter Second Quarter Third Quarter Fourth Quarter 1 58.33 41.67 25.00 8.33 2 27.78 38.89 50.00 61.11 5-Year Recovery Year First Quarter Second Quarter Third…arrow_forward32 Assume that on 31st December 2014 Ali and Sons Company purchased a machine for OMR 20000 and expecting the salvage value after its useful life of 5 years is OMR 2000. Calculate the book value of the machine on 31st December 2018 by following Straight line depreciation method. a. OMR 5600 b. OMR 14000 c. OMR 9200 d. OMR 2000 Clear my choicearrow_forward
- Problem 8-4 Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) On June 8, 2021, Holly purchased a residential apartment building. The cost basis assigned to the building is $650,000. Holly also owns another residential apartment building that she purchased on October 15, 2021, with a cost basis of $400,000. Click here to access the depreciation tables. Round your answers to the nearest dollar. a. Calculate Holly's total depreciation deduction for the apartments for 2021 using MACRS. b. Calculate Holly's total depreciation deduction for the apartments for 2022 using MACRS.arrow_forwardProblem 8-31 (LO. 2, 3) Orange Corporation acquired new office furniture on August 15, 2020, for $130,000. Orange does not elect immediate expensing under 5 179. Orange claims any available additional first-year depreciation. If required, round your answer to the nearest dollar. Click here to access Exhibit 8.1 and the depreciation tables in the textbook. a. Determine Orange's cost recovery for 2020. The office furniture is classified as seven-year v class of property for MACRS. If bonus depreciation is elected, Orange's deduction is $ 9,289 x b. Determine Orange's cost recovery for 2020 if Orange decided to only use $52,000 of bonus depreciation and normal MACRS on the balance of the acquisition cost. 74,289 Xarrow_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
- 1 QUE A plant asset cost $101700 when it was purchased on January 1, 2011. It was depreciated by the straight-line method based on a 9-year life with no salvage value. On June 30, 2018, the asset was discarded with no cash proceeds. What gain or loss should be recognized on the retirement? $16950 loss. $11300 gain. $22600 loss. No gain or loss. 2 QUE Admire County Bank agrees to lend Vaughn Brick Company $599000 on January 1. Vaughn Brick Company signs a $599000, 8%, 9-month note. What entry will Vaughn Brick Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30? a Notes Payable 634940 Cash 634940 b Notes Payable 599000 Interest Payable 35940 Cash 634940 c Interest Payable 23960 Notes Payable 599000 Interest Expense 11980 Cash 634940 d Interest Expense 35940 Notes Payable 599000…arrow_forwardProblem 8-30 (Algorithmic) (LO. 1, 2) In 2020, José purchased a house for $189,900. He used the house as his personal residence. In November 2023, when the fair market value of the house was $315,700, he converted the house to rental property. If required, round your answers to the nearest dollar. Click here to access depreciation tables in the textbook. a. José's basis for cost recovery for the property is $ 189,900 ✔. b. Under MACRS, the cost recovery period for residential rental real estate is 27.5 mid-month years, and it is subject to the ✓ convention. c. The cost recovery for 2023 is $ x.arrow_forwardMontello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.arrow_forward
- LO.1 Anne sold her home for 290,000 in 2019. Selling expenses were 17,400. She purchased it in 2013 for 200,000. During the period of ownership, Anne did the following. Deducted 50,500 office-in-home expenses, which included 4,500 in depreciation. (Refer to text Section 9-6a). Deducted a casualty loss in 2015 for residential trees destroyed by a hurricane (her county was declared a Federal disaster area). The total loss was 19,000 (after the 100 floor and the 10%-of-AGI floor), and Annes insurance company reimbursed her for 13,500. (Refer to text Section 7-3.) Raid street paving assessment of 7,000 and added sidewalks for 8,000. Installed an elevator for medical reasons. The total cost was 20,000, and Anne deducted 13,000 as medical expenses. (Refer to text Section 10-lb.) What is Annes realized gain?arrow_forwardeBook Problem 8-33 (LO. 2) Debra acquired and placed in service the following new assets during 2023: Date Asset Cost April 11 Furniture $40,000 July 28 Trucks 40,000 November 3 Computers 70,000 Debra does not elect immediate expensing under § 179. She does not claim any available additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the depreciation tables to use for this problem. a. What MACRS convention applies to the assets? b. What class of property is each asset for MACRS? Furniture: Trucks: Computers: c. The cost recovery deductions for the current year is: Furniture: Trucks: Computers: Check My Work 1 more Check My Work uses remaining. All work saved.arrow_forwardFIXED ASSET 5 PT ABC sold one of its old machines on June 30, 2020. The machine was purchased for $110,000 on January 1, 2016, and was depreciated on a straight-line basis for 10 years with $10,000 residual value. The machine was sold for $53,000. Instruction: Prepare entries of machine disposal including depreciation expense until time of sales.arrow_forward
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