Dalton Freight Co. purchased a delivery truck on January 1, 2017, for $58,000. They installed a rear hydraulic lift for $7,500 and paid $2,700 in sales tax. Additionally, Dalton paid $2,200 for a one-year insurance policy. The estimated useful life of the truck is 8 years, and the residual value is $9,000. If Dalton uses the straight-line depreciation method, what is the book value at the end of 2018?
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- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the life of the truck two years beyond the original estimated life. Related information is provided below. Cost of truck 65,000 Salvage value 5,000 Original estimated life 6 years The truck was purchased on January 1, 20-1. The engine was replaced on January 1, 20-6. Using straight-line depreciation, compute depreciation expense for 20-6.Shanahan Construction purchased a crane on January 1, 2015, for $102,750. At the time of purchase, the crane was estimated to have a life of 6 years and a residual value of $6,750. In 2017, Shanahan determined that the crane had a total useful life of 7 years and a residual value of $4,500. If Shanahan uses the straight-line method of depreciation, what will be the 2017 depreciation expense for the crane? a.$13,250 b.$9,464 c.$16,000 d.$8,000
- On January 1, 2017, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid $1,000 for transportation and installation. The expected useful life of the machine is 6 years and the residual value is $5,000. If Woodstock uses the straight-line depreciation method, which of the following statements is incorrect? Group of answer choices A)The annual depreciation expense is $6,000. B)The December 31, 2017 book value was $35,000. c)The December 31, 2019 accumulated depreciation balance was $18,000. D)The December 31, 2018 book value was $24,000. E)All of the above are correctOn June 30, 2016, Rosetta Granite purchased a machine for $120,000. The estimated useful life of the machine is eight years and no residual value is anticipated. An important component of the machine is a specialized highspeed drill that will need to be replaced in four years. The $20,000 cost of the drill is included in the $120,000 cost of the machine. Rosetta uses the straight-line depreciation method for all machinery. Required: 1. Calculate depreciation for 2016 and 2017 applying the typical U.S. GAAP treatment. 2. Repeat requirement 1 applying IFRS.Marsh Corporation purchased a machine on July 1, 2012, for $1,250,000. The machine was estimated to have a useful life of 10 years with an estimated salvage value of $70,000. During 2015, it became apparent that the machine would become uneconomical after December 31, 2019, and that the machine's salvage value is now $0. Accumulated depreciation on this machine as of December 31, 2014, was $295,000. What should be the charge for depreciation in 2015 under generally accepted accounting principles? O $177,000 O $191,000 O $205,000 O $238,750
- On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $225,000. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $33,000. On March 1, 2021, the truck was sold for $95,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required:1. Prepare the journal entry to update depreciation in 2021.2. Prepare the journal entry to record the sale of the truck.3. Assuming that the truck was instead sold for $123,000, prepare the journal entry to record the sale.On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $126,000. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $30,000. On March 1, 2021, the truck was sold for $58,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service.Required:1. Prepare the journal entry to update depreciation in 2021.2. Prepare the journal entry to record the sale of the truck.3. Assuming that the truck was instead sold for $80,000, prepare the journal entry to record the sale.Samson Manufacturing Company, a calendar year company, purchased a machine for $65,000 on January 1, 2015. At the date of purchase, Samson incurred the following additional costs: Loss on sale of old machinery $ 1,000 Freight-in 500 Installation cost 2,000 Testing costs prior to regular operation 300 The machine’s estimated salvage value was $5,000, and Samson estimated it would have a useful life of 20 years with depreciation being computed on the straight-line method. In January 2017, accessories costing $3,600 were added to the machine to reduce its operating costs. These accessories neither prolonged the machine’s life nor provided any additional salvage value.
- On January 1, 2016, Wasson Company purchased a delivery truck costing $40,000. The truck has an estimated 6-year life and a $4,000 residual value. Wason uses the units-of-production depreciation method and Wasson estimates that the truck will be driven 100,000 miles over its life. What is the truck's book value as of December 31, 2017 assuming the vehicle was driven 10,000 miles during 2016 and 18,000 miles during 2017$On June 30, 2018, Rosetta Granite purchased a machine for $120,000. The estimated useful life of the machineis eight years and no residual value is anticipated. An important component of the machine is a specialized highspeed drill that will need to be replaced in four years. The $20,000 cost of the drill is included in the $120,000 costof the machine. Rosetta uses the straight-line depreciation method for all machinery.Required:1. Calculate depreciation for 2018 and 2019 applying the typical U.S. GAAP treatment.2. Repeat requirement 1 applying IFRS.On January 1, 2017, Extensive Manufacturing purchased a machine for $780,000 that it expected to have a useful life of four years. The company estimated that the residual value of the machine was $60,000. Extensive Manufacturing used the machine for two years and sold it on January 1, 2019, for $150,000. As of December 31, 2018, the accumulated depreciation on the machine was $360,000. Read the requirements. 1. Calculate the gain or loss on the sale of the machinery. Extensive Manufacturing will record a of $ on the sale of the machinery.
