Depreciation by Two Methods; Sale of Fixed AssetNew lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year),has an estimated useful life of five years and an estimated residual value of $48,400. The manager requestedinformation regarding the effect of alternative methods on the amount of depreciation expense each year.On March 4 of Year 5, the equipment was sold for $82,400.Required:1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulateddepreciation at the end of each year, and the book value of the equipment at the end of each year by thefollowing methods:a. Straight-line methodDepreciationAccumulated Depreciation,YearExpenseEnd of Year12345b. Double-declining-balance methodYearDepreciationExpense12345Accumulated Depreciation,End of YearBook Value,End of Year$$$48,400$$Book Value,End of Year

The objective of the question is to calculate the annual depreciation expense, accumulated…

Answered: Depreciation by Two Methods; Sale of…

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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Disposal of fixed asset Equipment acquired on January 6 at a cost of $386,400 has an estimated useful life of 10 years and an estimated residual value of $50,400. a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 Year 2 Year 3 b. What was the book value of the equipment on January 1 of Year 4? c. Assuming that the equipment was sold on January 3 of Year 4 for $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3 d. Assuming that the equipment had been sold on January 3 of Year 4 for $291,300 instead of $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3
New lithographic equipment, acquired at a cost of $800,000 on March 1 at the beginning of a fiscal year, has an estimated useful life of 5 years and an estimated residual value of $90,000 The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year, In the first week of the fifth year, on March 4, the equipment was sold for $134,570. Required: 1. Determine the annual depreciation expense for each of the estimated 5 years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. 2. Journalize the entry to record the sale, assuming the manager chose the double-declining-balance method. 3. Journalize the entry to record the sale in (2), assuming that the equipment was sold for $88,180 instead of $134,570.
Depreciation by Three Methods; Partial Years Layton Company purchased tool sharpening equipment on October 1 for $37,800. The equipment was expected to have a useful life of three years or 4,320 operating hours, and a residual value of $1,080. The equipment was used for 800 hours during Year 1, 1,500 hours in Year 2, 1,300 hours in Year 3, and 720 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. a. Straight-line method Year Amount Year 1 $fill in the blank 1 Year 2 $fill in the blank 2 Year 3 $fill in the blank 3 Year 4 $fill in the blank 4 b. Units-of-activity method Year Amount Year 1 $fill in the blank 5 Year 2 $fill…
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $85,590. The equipment was expected to have a useful life of three years, or 5,940 operating hours, and a residual value of $2,430. The equipment was used for 1,100 hours during Year 1, 2,100 hours in Year 2, 1,800 hours in Year 3, and 940 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.
An asset was purchased for $103,000 on January 1, Year 1 and originally estimated to have a useful life of 10 years with a residual value of $9,000. At the beginning of the third year, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Compute the third-year depreciation expense using the revised amounts and straight-line method. Round your answer to the nearest dollar. Oa. $19,550 Ob. $20,550 Oc. $21,050 Od. $21,550
Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $587,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $41,420. a. What was the depreciation for the first year? Round your answer to the nearest cent. 2$ b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold at the end of year eight for $97,086. Round your answer to the nearest cent. Enter your answer as a positive amount. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $41,550. The equipment was expected to have a useful life of three years, or 5,700 operating hours, and a residual value of $1,650. The equipment was used for 1,000 hours during Year 1, 2,000 hours in Year 2, 1,700 hours in Year 3, and 1,000 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Note: Round all final values for each depreciation method and each year to the nearest whole dollar.
Depreciation by Two Methods A storage tank acquired at the beginning of the fiscal year at a cost of $129,600 has an estimated residual value of $7,500 and an estimated useful life of 25 years. a. Determine the amount of annual depreciation by the straight-line method. b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your answers to the nearest dollar. Depreciation Year 1 Year 2
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $65,070. The equipment was expected to have a useful life of three years, or 4,860 operating hours, and a residual value of $1,890. The equipment was used for 900 hours during Year 1, 1,700 hours in Year 2, 1,500 hours in Year 3, and 760 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. a. Straight-line method Year Amount Year 1 Year 2 Year 3 Year 4 b. Units-of-output method Year Amount Year 1 Year 2 Year 3 Year 4 c. Double-declining-balance method Year Amount Year 1 Year 2 Year 3 Year 4
Depreciation by three methods; partial years Perdue Company purchased equipment on April 1 for $63,990. The equipment was expected to have a useful life of 3 years, or 5,400 operating hours, and a residual value of $1,890. The equipment was used for 1,000 hours during Year 1, 1,900 hours in Year 2, 1,600 hours in Year 3, and 900 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining- balance method. Note: FOR DECLINING BALANCE ONLY, round the final multiplier to four decimal places. Then, round the answer for each year to the nearest whole dollar. a. Straight-line method Year Year 1 Year 2 Year 3 Year 4 Year b. Units-of-activity method Year 1 Year 2 Year 3 Year 4 Year Year 1 Year 2 Amount c. Double-declining-balance method Year 3 3000 Year 4 Amount 00000000
Revision of Depreciation Equipment with a cost of $687,600 has an estimated residual value of $68,100, has an estimated useful life of 35 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. b. Determine the book value after 18 full years of use. c. Assuming that at the start of the year 19 the remaining life is estimated to be 21 years and the residual value is estimated to be $56,100, determine the depreciation expense for each of the remaining 21 years.
Straight-Line Depreciation A building acquired at the beginning of the year at a cost of $104,000 has an estimated residual value of $4,000 and an estimated useful life of 10 years. Determine the following: (a) The depreciable cost (b) The straight-line rate (c) The annual straight-line depreciation %

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