Flint Company purchased a delivery truck for $29,000 on January 1, 2022. The truck has an expected salvage value of $2,740, and isexpected to be driven 101,000 miles over its estimated useful life of 10 years. Actual miles driven were 16,600 in 2022 and 13,100 in2023. Compute depreciation expense for 2022 and 2023 using (1) the straight-line method, (2) the units-of-activity method, and (3) thedouble-declining-balance method. (Round depreciation cost per unit to 2 decimal places, e.g. 0.50 and depreciation rate toO decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.)Depreciation Expense20222023(1)Straight-line method2$$(2)Units-of-activity method242$(3)Declining-balance method$42$

DEPRECIATION : A decrease in the value of an item over time, owing to wear and tear in particular.…

depreciatión expense for 2022 and 2023 using (1) the straight-line method, (2) the units-of-activity r double-declining-balance method. (Round depreciation cost per unit to 2 decimal places, e.g. 0.50 and de O decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.) Depreciation Expense 2022 2023 (1) Straight-line method 2$

depreciatión expense for 2022 and 2023 using (1) the straight-line method, (2) the units-of-activity r double-declining-balance method. (Round depreciation cost per unit to 2 decimal places, e.g. 0.50 and de O decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.) Depreciation Expense 2022 2023 (1) Straight-line method 2$

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On January 1, 2024, Trusty Delivery Service purchased a truck at a cost of $62,000. Before placing the truck in service, Trusty spent $3,000 painting it, $1,200 replacing tires, and $3,800 overhauling the engine. The truck should remain in service for five years and have a residual value of $5,000. The truck's annual mileage is expected to be 28,000 miles in each of the first four years and 18,000 miles in the fifth year-130,000 miles in total. In deciding which depreciation method to use, Carl Thomas, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the requirements. Requirement 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. Begin by preparing a depreciation schedule using the straight-line method. Straight-Line Depreciation Schedule Date 1-1-2024 12-31-2024…
Spears Corporation bought a machine on January 1, 2016. In purchasing the machine, the company paid $50,000 cash and signed an interest-bearing note for $100,000. The estimated useful life of the machine is 5 years, after which time the salvage value is expected to be $15,000. The machine is expected to produce 67,500 widgets during its useful life. Given this information, if 10,000 widgets are produced in 2017, how much depreciation should be recorded in 2017, assuming that Spears Corporation uses the units-of-production depreciation method? a.$20,000 b.$22,222 c.$40,000 d.$30,000
Sweet Manufacturing purchased a machine on August 1, 2023 for use in its factory. Sweet paid $549,600 for the machine and estimated that it had a useful life of 10 years, at the end of which time the machine was expected to have a residual value of $48,000. During its life, the machine was expected to produce 264,000 units. During 2023, the machine produced 26,000 units, and produced 40,000 in 2024. The machine was subject to a 20% CCA rate, and Sweet's year-end was December 31. The machine is eligible for the Accelerated Investment Incentive. Calculate the annual depreciation amount for 2023 and 2024 using the Capital Cost Allowance method. Please ensure that your answer is correct.
Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $69,980 to dismantle the depot and remove the tanks at the end of the depot's useful life. (a) Prepare the journal entries to record the depot and the asset retirement obligation for the depot on January 1, 2020. Based on an effective-interest rate of 6%, the present value of the asset retirement obligation on January 1, 2020, is $39,076. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2020 (To record the depot) January 1, 2020 (To record the asset retirement obligation) eTextbook and Media
Whispering Winds Corp. purchased a delivery truck for $34,000 on January 1, 2022. The truck has an expected salvage value of $5,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 16,100 in 2022 and 11,700 in 2023. (a1) Your answer is correct. Calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost .29 per mile eTextbook and Media List of Accounts Attempts: unlimited %24
On January 1, 2017, Alissa Company purchased a truck for $450,000, and planned to use the truck for 150,000 miles and then sell the truck for $90,000. The company drove the truck for 30,000 miles in 2017 and 40,000 miles in 2018. On January 1, 2019, the company did a major overhaul of the truck for $75,000 and revised the total useful life of the truck to be 250,000 miles and the salvage value to be $60,000. Assuming the company uses the units of output method and that it used the truck for 35,000 miles in 2019, determine the depreciation expense for the truck for 2019. A. $43,167 B. $47,250 C. $57,750 D. $40,250
Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $57,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $6,000. On January 1, 2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $1,200. Required: 1. Prepare the year-end journal entry for depreciation on December 31, 2024. No depreciation was recorded during the year. Record depreciation expense for 2024. Event General Journal Debit Credit 1 Depreciation expense 4,425 Accumulated depreciation—computer 4,425 Prepare the year-end journal entry for depreciation on December 31, 2024. Assume that the company uses the double-declining-balance method instead of the straight-line method. Event General Journal Debit Credit 1 Depreciation…
In 1998, Novak Company completed the construction of a building at a cost of $2,500,000 and first occupied it in January 1999. It was estimated that the building will have a useful life of 40 years and a salvage value of $76,000 at the end of that time. Early in 2009, an addition to the building was constructed at a cost of $625,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $25,000. In 2027, it is determined that the probable life of the building and addition will extend to the end of 2058, or 20 years beyond the original estimate. (a) Using the straight-line method, compute the annual depreciation that would have been charged from 1999 through 2008. Annual depreciation from 1999 through 2008 $ GA /yr.
Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $69,980 to dismantle the depot and remove the tanks at the end of the depot's useful life. (a) Your answer is partially correct. Prepare the journal entries to record the depot and the asset retirement obligation for the depot on January 1, 2020. Based on an effective-interest rate of 6%, the present value required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) the asset retirement obligation on January 1, 2020, is $39,076. (If no entry is Date Account Titles and Explanation Debit Credit January 1, depot 2020 639700 Cash 639700 (To record the depot) January 1, 2020 depot 39076 Asset Retirement…
On April 17, 2024, the Loadstone Mining Company purchased the rights to a copper mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the copper totaled $5,200,000. The company expects to extract 1,040,000 tons of copper during a four-year period. During 2024, 254,000 tons were extracted and sold immediately. Required: Calculate depletion for 2024. Is depletion considered part of the product cost and included in the cost of inventory?
On March 31, 2024, a company purchased the right to remove gravel from an old rock quarry. The gravel is to be sold as roadbed for highway construction. The cost of the quarry rights was $232,200, with estimated salable rock of 27,000 tons. During 2024, The company loaded and sold 5,000 tons of rock and estimated that 22,000 tons remained on December 31, 2024. On January 1, 2025, the company estimated that 10,000 tons still remained. During 2025, the company loaded and sold 15,000 tons. The company uses the units-of-production method. The company would record depletion in 2024 in the amount of: Note: Do not round depletion rate per ton. Multiple Choice $43,340. $52,773. $32,250. $43,000.
At the beginning of 2020, Riverbed Company acquired equipment costing $156,400. It was estimated that this equipment would have a useful life of 6 years and a salvage value of $15,640 at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year.During 2022 (the third year of the equipment’s life), the company’s engineers reconsidered their expectations, and estimated that the equipment’s useful life would probably be 7 years (in total) instead of 6 years. The estimated salvage value was not changed at that time. However, during 2025 the estimated salvage value was reduced to $5,000.Indicate how much depreciation expense should be recorded each year for this equipment, by completing the following table. Year DepreciationExpense AccumulatedDepreciation 2020 $enter a dollar amount $enter a dollar amount 2021 enter a dollar amount enter a…

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