Burger Chef acquired a delivery truck on March 1, 2021, for $16,100. The company estimates a residual value of $1,300 and a six-yearservice life. It expects to drive the truck 74,000 miles. Actual mileage was 11,100 miles in 2021 and 13,100 miles in 2022.Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do notround intermediate calculations.)35DepreciationExpenseYear20212022

Depreciation is the reduction in the value of fixed assets due to normal wear and tear, passage of…

Answered: Burger Chef acquired a delivery truck…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2018, Canseco Plumbing Fixtures purchased equipment for $30,000. Residual value at the endof an estimated four-year service life is expected to be $2,000. The company expects the machine to operatefor 10,000 hours. Calculate depreciation expense for 2018 and 2019 using each of the following depreciationmethods: (a) straight line, (b) sum-of-the-years’-digits, (c) double-declining balance, and (d) units-of-productionusing machine hours. The machine operated for 2,200 and 3,000 hours in 2018 and 2019, respectively
Tasty Subs acquired a delivery truck on October 1, 2021, for $25,800. The company estimates a residual value of $2,400 and a six- year service life. Required: Calculate depreciation expense using the straight-line method for 2021 and 2022, assuming a December 31 year-end. 2021 2022 Depreciation expense
Burger Chef acquired a delivery truck on March 1, 2024, for $35,400. The company estimates a residual value of $1,400 and a five- year service life. It expects to drive the truck 85,000 miles. Actual mileage was 13,900 miles in 2024 and 13,200 miles in 2025. Calculate depreciation expense using the activity-based method for 2024 and 2025, assuming a December 31 year-end. (Do not round intermediate calculations.) Year 2024 2025 Depreciation Expense
On September 1, 2018, Gabe's Brewing Co. purchased equipment for $168,000. Residual value at the end of an estimated 8-year useful life is expected to be $18,000. The company expects the machine to operate for 20,000 hours. The machine operated for 1,500 and 3,500 hours in 2018 and 2019, respectively. REQUIRED: 1. Calculate depreciation expense for 2018 and 2019 using the straightline method. 2. Calculate depreciation expense for 2018 and 2019 using the 150% declining balance method. 3. Calculate depreciation expense for 2018 and 2019 using the units-of-production method. 4. Now, assume the company sells the equipment on December 31, 2019, for $135,000 cash. Prepare the journal entry for the sale of the equipment assuming the company has used the straight-line method of depreciating the equipment.
On January 1, 2024, Canseco Plumbing Fixtures purchased equipment for $38,000. Residual value at the end of an estimated 7 year service life is expected to be $10,000. The company expects the equipment to operate for 12,000 hours. Required: a. Calculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchased on January 1, 2024. b. Calculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchased on March 31, 2024. Complete this question by entering your answers in the tabs below. Required A Required B Calculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchased on January 1, 2024. Sum-of-the-years' digits depreciation 2024 2025 Depreciable Base x Rate per Year = Depreciation Expense x x =
On April 1, 2021, Metro Co. purchased machinery at a cost of $42,000. The machinery is expected to last 10 years and to have a residual value of $6,000. Required: Compute depreciation for 2021 (for 9 months, 4/1/21 ~ 12/31/21) assuming the sum-of-the-years'-digits method is used. No credit if no computation is shown.
Dove Ltd purchased new equipment on 1 July 2016, at a cost of $500,000. The company estimated that the equipment has a residual value of $80,000. The equipment is expected to be used for 6 years. Required: Assuming the financial year ends on 30 June, calculate the depreciation expense using sum-of-years digit methods for years ended 2018 to 2020. Please show the calculation of the sum-of-years digit and depreciable amount. Note: The depreciation table is not required.
Tasty Subs acquired a delivery truck on October 1, 2021, for $21,500. The company estimates a residual value of $2,500 and a six-year service life. It expects to drive the truck 100,000 miles. Actual mileage was 5,000 miles in 2021 and 19,000 miles in 2022.Required:Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end.
China Dragon purchased new restaurant equipment on September 1, 2021, for $9,000. Residual value at the end of an estimated five- year service life is expected to be $1,200. Calculate depreciation expense using the straight-line method for 2021 and 2022, assuming a December 31 year-end. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar.) Depreciation Expense Year 2021 2022
Vita Water purchased a used machine for $117,200 on January 2, 2020. It was repaired the next day at a cost of $4,900 and installed on a new platform that cost $1,700. The company predicted that the machine would be used for six years and would then have a $32,720 residual value. Depreciation was to be charged on a straight-line basis to the nearest whole month. A full year’s depreciation was recorded on December 31, 2020. On September 30, 2025, it was retired.Required:1. Prepare journal entries to record the purchase of the machine, the cost of repairing it, and the installation. Assume that cash was paid. 2. Prepare entries to record depreciation on the machine on December 31 of its first year and on September 30 in the year of its disposal. (Round intermediate calculations to the nearest whole dollar.) 3. Prepare entries to record the retirement of the machine under each of the following unrelated assumptions: a. It was sold for $35,000. b. It was sold for $38,000. c.…

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