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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Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of$12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST.Required:a) Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June.Calculate the depreciation expense for the year 2019–20 using each of the following depreciationmethods (6 marks) straight-line diminishing balance (depreciation rate has been calculated as 31%) units of production (assume the van was driven 78,000 kilometres during the financial year)b) Record the adjusting entries for the depreciation at 30 June 2021 using diminishing balancemethod. c) Show how the van would appear in the balance sheet prepared at the end of year 2 using Straightline method.
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 =
Storm Delivery Company purchased a new delivery truck for $69,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 150,000 miles and a residual value of $3,000. The truck was driven 8,000 miles in 2019 and 20,000 miles in 2020. Storm computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.) Straight-line method 2019 $ fill in the blank 2020 $ fill in the blank Sum-of-the-years'-digits method 2019 $ fill in the blank 2020 $ fill in the blank
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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