Chubbyville purchases a delivery van for $22,500. Chubbyville estimates a four-year service life and a residual value of $2,000. Duringthe four-year period, the company expects to drive the van 110,000 miles. Calculate annual depreciation for the four-year life of the vanusing each of the following methods.1. Straight-line.Depreciation expense2. Double-declining-balance. (Round your depreciation rate to 2 decimal places. Round your final answers to the nearest wholedollar.)End of Year AmountsDepreciationExpenseAccumulatedYearBook ValueDepreciation1.234Total3. Actual miles driven each year were 19,000 miles in Year 1; 30,000 miles in Year 2; 23,000 miles in Year 3; and 26,000 miles in Year4. Note that actual total miles of 98,000 fall short of expectations by 12,000 miles. Calculate annual depreciation for the four-year lifeof the van using activity-based. (Round your depreciation rate to 2 decimal places.)

Depreciation expense is the non-cash expense which is recorded in the books to report the regular…

Answered: Chubbyville purchases a delivery van…

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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Questions # 24-27 are based on the information below: Chubbyville purchases a delivery van for $23,500. Chubbyville estimates a four-year service life and a residual value of $2,500. During the four-year period, the company expects to drive the van 105,000 miles. Actual miles driven were 24,000 miles in Year 1 and 26,000 miles in Year 2. 24. Using the straight-line method, what is the depreciation expense for year 2? A. $5,250 B. $5,875 C. $10,500 D. $11,750 25. Using the straight-line method, what is the book value at the end of year 3? A. $9,750 B. $10,550 C. $7,750 D. $8,250 26. Using double-declining balance method, what is the depreciation expense for year 1? A. $5,250 B. $5,875 C. $11,250 D. $11,750 27. Using the activity-based method, what is the balance in accumulated depreciation at the end of year 2? A. $10,000 B. $4,800 C. $5,200 D. $13,500
Murrays Ltd. purchased a new bus for $200,000. The company expects the bus to be used for trips between Sydney and Canberra for 10 years, or 800,000 miles, with an estimated residual value of $30,000 at the end of that time. During the 3rd year the bus was driven 96,000 miles. Calculate the depreciation expense for the 3rd year for each of the methods below. Show your solutions.I. Straight-line II. Diminishing balance at 20% p.a. III. Units-of-activity
Billings Corporation purchased a wood pulp mixer for $17,344. Delivery costs totaled $464. The useful is 7 years, and the salvage value is $1,260. Prepare a depreciation schedule using the sum-of-the-years' digits method. Year Total Depreciation ($) x Depreciation Rate Fraction 1 2 3 4 5 6 7 Need Help? $ $ $ $ $ $ $ Read It X X X X X X X Watch It Billings Corporation SYD Depreciation Schedule-Wood Pulp Mixer Master It 7/28 6/28 5/28 4/28 3/28 2/28 1/28 = || || Annual Depreciation ($) Accumulated Depreciation ($) $ $ $ $ $ $ $ $ $ $ $ $ $ $ Book Value ($) $17,808 (new) $ $ $ $ $ $ $
Murrays Ltd. purchased a new bus for $200,000. The company expects the bus to be used for trips between Sydney and Canberra for 10 years, or 800,000 miles, with an estimated residual value of $30,000 at the end of that time. During the 3rd year the bus was driven 96,000 miles. Calculate the depreciation expense for the 3rd year for each of the methods below. Show your solutions.I. Straight-line II. Diminishing balance at 20% p.a. III. Units-of-activity Banksia Company completed the following transactions during 2018-2019. The annual accounting period ends 30 June 2019.a) Purchased inventory on credit at cost of AUD 16,800; perpetual inventory system is used.b) Received a customer deposit of AUD 18,000 from ABC Ltd for services to be rendered in the future.c) Borrowed AUD 900,000 from the bank on 1 March 2019 by giving the bank a six-month, 9% interest bearing note payable.d) Performed AUD 8,000 of the services paid for by ABC Ltd; the rest will be rendered in August 2019.e) Received…
On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $2,000. During the first year, the band performs 45 concerts. Compute the first-year depreciation using the straight-line method. Straight-Line Depreciation Annual Depreciation Expense Choose Numerator: Choose Denominator: Beginning book value I Estimated units of production Depreciation expense %3D
Some trucks purchased by a U-Haul franchise should last 7 years. The purchase price was $172,000. Shipping costs were $5,000. The trade-in (salvage value) is $19,000. Prepare a depreciation schedule by using the double-declining-balance method for the trucks. (Round dollar amounts to the nearest cent. Round your percentages to six decimal places.) U-HaulDouble-Declining—Balance Depreciation ScheduleTruck Fleet End of Year Beginning Book Value ($) Depreciation Rate (%) Depreciation for the Year ($) Accumulated Depreciation ($) Ending book value ($) $177,000 (new) 1
An asset costs $290,000 and is classified as a ten-year asset. What is the annual depreciation expense for the first three years under the straight-line and the modified accelerated cost recovery systems of depreciation? Be sure to apply the half-year convention to straight-line depreciation. Use Exhibit 9.4 to answer the question. Round your answers to the nearest dollar. Straight-line depreciation: Year Depreciation expense 1 $ 2 $ 3 $ Accelerated cost recovery system of depreciation: Year Depreciation expense 1 $ 2 $ 3 $
On January 1, the Matthews Band pays $66,600 for sound equipment. The band estimates it will use this equipment for five years and perform 200 concerts. It estimates that after five years it can sell the equipment for $2,000. During the first year, the band performs 55 concerts. Compute the first-year depreciation using the units-of-production method. Select formula for the depreciation rate of Units of Production: Calculate the first year depreciation expense: Depreciation per concert Concerts in first year Depreciation in first year
Mike’s Tires purchases a new piece of equipment for $5,200. It also pays $500 for installation and$200 for delivery. If the company expects the equipment to last for 10 years, with a $900 residual value,calculate the following: a. Depreciable cost b. Straight-line rate c. Annual straight-line depreciation.
NewTech purchases computer equipment for $273,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $26,000. Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. Note: Enter all amounts as positive values. Depreciation for the Period End of Period Year Beginning-Year Book Value Depreciation Rate Annual Depreciation Accumulated Year-End Depreciation Book Value Year 1 Year 2 Year 3 Year 4 Total $ 0

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