Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four- year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles in 2022. Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do not round intermediate calculations.) Year 2021 2022 Depreciation Expense

Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four- year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles in 2022. Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do not round intermediate calculations.) Year 2021 2022 Depreciation Expense

Name: Burger Chef acquired a delivery truck on March 1, 2021, for $27,800.
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four-year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: n March 31, 2024, Canseco Plumbing Fixtures purchased equipment for $58,000. Residual value at the…

A: Depreciation is reduction in the value of asset due to its use, wear or tear.Salvage value which is…

Q: On 25 March 2020, Miracle Company bought a machine at $1,350,000 with an estimated useful life of 15…

A: Cost of Machine= $ 1350000 Useful life = 15 years Need to calculate depreciation as per the…

Q: El Tapitio purchased restaurant furniture on September 1, 2024, for $37,000. Residual value at the…

A: The depreciable cost of the furniture can be calculated as follows: Cost of furniture = $37,000…

Q: On April 22, 2023, Cullumber Enterprises purchased equipment for $130,300. The company expects to…

A: Answer:- Depreciation meaning:- A tangible or physical asset's cost can be dispersed over its useful…

Q: Burger Chef acquired a delivery truck on March 1, 2021, for $16,100. The company estimates a…

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

Q: During 2018, Starbucks purchased fixed assets costing approXximately $1.8 billion. Assume that the…

A: Book value of the asset at the end of the period is the value after depreciation. Depreciation is…

Q: On April 1, 2023, Ice Drilling Co. purchased a trencher for $140,000. The machine was expected to…

A: The objective of the question is to calculate the depreciation expense for the years 2023 and 2024…

Q: On April 22, 2023, Ivanhoe Enterprises purchased equipment for $134,400. The company expects to use…

A: The Depreciation expense is charged on fixed assets as reduction in the value of the fixed assets…

Q: Norman Delivery Company purchased a new delivery truck for $69,000 on April 1, 2019. The truck is…

A: Depreciation expense is a form of monetary reduction in the value of the asset throughout its life.…

Q: On January 1, 2021, Canseco Plumbing Fixtures purchased equipment for $42,000. Residual value at the…

Q: Marigold Corporation purchased a truck at the beginning of 2023 for $47,800. The truck is estimated…

A: It is an annual deduction which can be claimed on depreciable asset while computing taxable income.…

Q: Storm Delivery Company purchased a new delivery truck for $69,000 on April 1, 2019. The truck is…

A: Answer 1) Computation of depreciation expenses for 2019 and 2020 is as follows: Double -declining…

Q: On July 1, 2024, Action Printers purchased a printer for $67,000. It expects the printer to last for…

A: In the case of an asset purchased during the year depreciation of an asset under the straight-line…

Q: On March 31, 2021, Canseco Plumbing Fixtures purchased equipment for $38,000. Residual value at the…

Q: Gray Corporation purchased a delivery van on March 1, 2020. Assume this van was the company's only…

A: Assets: Assets are the resources of an organization used for the purpose of business operations.…

Q: China Dragon purchased new restaurant equipment on September 1, 2024, for $12,000. Residual value at…

A: The Depreciation expense is charged on fixed assets as reduction in the value of the fixed assets…

Q: Salamon Company purchased equipment on January 1, 2020 for $90,000. It is estimated that the…

A: Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life…

Q: Clifford Delivery Company purchased a new delivery truck for $45,000 on April 1, 2019. The truck is…

A: Since, we answer only upto 3 sub-parts, we shall answer first three. Please resubmit a new question…

Q: On January 1, 2024, Canseco Plumbing Fixtures purchased equipment for $52,000. Residual value at the…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: On January 1, 2024, Canseco Plumbing Fixtures purchased equipment for $52,000. Residual value at the…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of…

A: Depreciation is the expense of distributing the cost of a tangible asset over its useful life. There…

Q: Storm Delivery Company purchased a new delivery truck for $69,000 on April 1, 2019. The truck is…

A: Depreciable cost=Purchase value of truck-Residual value=$69,000-$3,000=$66,000

Q: Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of…

A: Depreciation per year (Straight line) = ( cost of Asset - Residual value ) / useful life of the…

Q: On January 1, 2018, Questor Airlines purchased å Used all residual value of $5,600,000. The company…

Q: 1. Shay Enterprises purchased equipment on March 18, 2018, at a cost of $40,000. The equipment was…

Q: Swifty Corporation purchased a delivery truck for $28,000 on January 1, 2020. The truck has an…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: On March 31, 2021, Canseco Plumbing Fixtures purchased equipment for $32,000. Residual value at the…

A: A ) Purchased Equipment = $ 32000 Residual value = $ 8000 Useful life = 4 years Depreciation under…

Q: Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a…

A: Year Depreciation expenses 2021 $4,280 2022 $5,840

Q: Muscat chocolates Company purchases equipment on January 1, 2017, at a cost of OMR 100000. The asset…

Q: Burger Chef acquired a delivery truck on March 1, 2021, for $31,600. The company estimates a…

A: Depreciation expense is reduction in the value of asset in that period ( how much value of asset is…

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.

Topic Video

Question

Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four-
year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles in 2022.
Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do not
round intermediate calculations.)
Year
2021
2022
Depreciation
Expense

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Working Note #1:-

VIEW

Step 3 Working Note #2:-

VIEW

Step 4 Final Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

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

Mountain View Resorts purchased equipment at the beginning of 2021 for $40,000. Residual value at the end of an estimated four- year service life is expected to be $8,200. The machine operated for 1,900 hours in the first year and the company expects the machine to operate for a total of 11,000 hours over its four-year life. Calculate depreciation expense for 2021, using each of the following depreciation methods: (1) straight-line, (2) double-declining- balance, and (3) activity-based. (Round your intermediate calculations to 2 decimal places.) Depreciation Expense Straight-line Double-declining-balance Activity-based
Adkins Bakery uses the modified half-month convention to calculate depreciation expense in the year an asset is purchased or sold. Adkins has a calendar year accounting period and uses the straight-line method to compute depreciation expense. On March 17, 2024, Adkins acquired equipment at a cost of $120,000. The equipment has a residual value of $40,000 and an estimated useful life of 3 years. What amount of depreciation expense will be recorded for the year ending December 31, 2024? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) OA. $22,222 OB. $13,333 O C. $20,000 OD. $26,667
On July 1, 2020 Waterway's Greenhouse purchased a new delivery truck for $100,000. Waterway estimates that the delivery truck will have a five-year useful life, or 225,000 kilometres, and a residual value of $10,000. Waterway's Greenhouse has a December 31 year end. Waterway drove the truck 14,000 km in 2020 and 38,000 km in 2021. Calculate depreciation expense using the straight-line method for 2020 and 2021. 2020 2021 Depreciation Expense eTextbook and Media Calculate depreciation expense using the double-diminishing-balance method for 2020 and 2021. 2020 2021 Depreciation Expense %24 eTextbook and Media Calculate depreciation expense using the units-of-production method for 2020 and 2021. (Round depreciable amount per unit to 2 decimal places, eg. 5.27 and the final answers to O decimal places, eg. 5,275.) 2020 2021 Depreciation Expense %24 %24
On Jan 1, 2019, Tuesday company purchased a delivery vehicle costing $40,000. The vehicle has an estimated 9 year life and $4,000 residual value. What is vehicle's accumulated depreciation as of December 31, 2020? Assuming they use straight line depreciation method. Do not put any decimal places.
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.
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.
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