Subjective Short Answer29. Equipment acquired on January 2, Year 1, at a cost of $525,000 has an estimated useful life of eight years and anestimated residual value of $45,000.RequiredWhat is the annual amount of depreciation for the first three years, assuming the straight-(a)line method of depreciation is used?(b) What is the book value of the equipment on January 1, Year 4?(c) Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize theentry to record the sale.(d) Assuming that the equipment is sold on January 2, Year 4, for $394,000, journalize theentry to record the sale.30. Perez Company has the following information for the pay period of January 15-31:Gross payrollSocial security rateMedicare rate$20,0006.0%Federal income tax withheldFederal unemployment tax rateState unemployment tax rate$2,5000.8%1.5%5.4%Assuming no employees are subject to ceilings for their earnings, calculate salaries payable and payroll taxexpense.Page 6Copyright Cengage Leaming. Powered by Cognero.Name:Class:Date:Acctg 1B-131. Prior to liquidating their partnership, Samuel and Brian had capital accounts of $60,000 and $240,000,respectively. The partnership assets were sold for $120,000. The partnership had no liabilities. Samuel and Brianshare income and losses equally.Required(a) Determine the amount of Samuel's deficiency.(b) Determine the amount distributed to Brian, assuming Samuel is unable to satisfy the deficiency.32. Hamir, Darci, and Pete are partners sharing income in the ratio of 3:2:1. After the firm's loss from liquidation isdistributed, the capital account balances were Hamir, $45,000 Dr.; Darci, $90,000 Cr., and Pete, $64,000 Cr. IfHamir is personally bankrupt and unable to pay any of the $45,000, what will be the amount of cash received byDarci and Pete upon liquidation? Show your work.

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29. Equipment acquired on January 2, Year 1, at a cost of $525,000 has an estimated useful life of eight years and an estimated residual value of $45,000. Required What is the annual amount of depreciation for the first three years, assuming the straight- line method of depreciation is used? What is the book value of the equipment on January 1, Year 4? (b) (c) Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize the entry to record the sale. (d) Assuming that the equipment is sold on January 2, Year 4, for $394,000, journalize the entry to record the sale.

29. Equipment acquired on January 2, Year 1, at a cost of $525,000 has an estimated useful life of eight years and an estimated residual value of $45,000. Required What is the annual amount of depreciation for the first three years, assuming the straight- line method of depreciation is used? What is the book value of the equipment on January 1, Year 4? (b) (c) Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize the entry to record the sale. (d) Assuming that the equipment is sold on January 2, Year 4, for $394,000, journalize the entry to record the sale.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Subjective Short Answer
29. Equipment acquired on January 2, Year 1, at a cost of $525,000 has an estimated useful life of eight years and an
estimated residual value of $45,000.
Required
What is the annual amount of depreciation for the first three years, assuming the straight-
(a)
line method of depreciation is used?
(b) What is the book value of the equipment on January 1, Year 4?
(c) Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize the
entry to record the sale.
(d) Assuming that the equipment is sold on January 2, Year 4, for $394,000, journalize the
entry to record the sale.
30. Perez Company has the following information for the pay period of January 15-31:
Gross payroll
Social security rate
Medicare rate
$20,000
6.0%
Federal income tax withheld
Federal unemployment tax rate
State unemployment tax rate
$2,500
0.8%
1.5%
5.4%
Assuming no employees are subject to ceilings for their earnings, calculate salaries payable and payroll tax
expense.
Page 6
Copyright Cengage Leaming. Powered by Cognero.
Name:
Class:
Date:
Acctg 1B-1
31. Prior to liquidating their partnership, Samuel and Brian had capital accounts of $60,000 and $240,000,
respectively. The partnership assets were sold for $120,000. The partnership had no liabilities. Samuel and Brian
share income and losses equally.
Required
(a) Determine the amount of Samuel's deficiency.
(b) Determine the amount distributed to Brian, assuming Samuel is unable to satisfy the deficiency.
32. Hamir, Darci, and Pete are partners sharing income in the ratio of 3:2:1. After the firm's loss from liquidation is
distributed, the capital account balances were Hamir, $45,000 Dr.; Darci, $90,000 Cr., and Pete, $64,000 Cr. If
Hamir is personally bankrupt and unable to pay any of the $45,000, what will be the amount of cash received by
Darci and Pete upon liquidation? Show your work.

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