Depreciation Expense Using the Units-of-Production Method The Likert Company is a coal company based in West Virginia. The company recently purchased a new coal truck for $180,000. The truck had an expected useful life of 200,000 miles and an expected salvage value of $6,000. Calculate the depreciation expense using the units-of-production method assuming the truck travelled 80,000 miles on company business during the year. $ 0

Depreciation Expense Using the Units-of-Production Method The Likert Company is a coal company based in West Virginia. The company recently purchased a new coal truck for $180,000. The truck had an expected useful life of 200,000 miles and an expected salvage value of $6,000. Calculate the depreciation expense using the units-of-production method assuming the truck travelled 80,000 miles on company business during the year. $ 0

Name: Depreciation Expense Using the Units-of-Production MethodThe Likert C
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Depreciation Expense Using the Units-of-Production MethodThe Likert Company is a coal company based in West Virginia. The company recently purchased a new coal truck for $180,000. The truckhad an expected useful life of 200,000 miles and an expected

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $341,800. The equipment was expected to have a useful life of four years, or 6,400 operating hours, and a residual value of $28,200. The equipment was used for 2,240 hours during year 1, 1,344 hours in Year 2, 1,792 hours in Year 3, and 1,024 hours in Year 4: Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-ane method, (b) the units-of-activity method, and (c) the double-decining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of- Activity Method Double- Declining Balance Method Year 2 Year 3 Year 4 Total 2. What method yields the highest depreciation expense for Year 17 3. What method yields the most depreciation over the four-year life of the equipment?
Comparing Three Depreciation Methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $248,600. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $20,600. The equipment was used for 2,900 hours during Year 1, 2,400 hours in Year 2, 1,400 hours in Year 3, and 900 hours in Year 4. Required: 1. 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-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each 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. Depreciation Expense Year Straight-Line Method Units-of-Output Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill…
Calculate strictly in Straight line method for upvotes
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $272,000. The equipment was expected to have a useful life of four years, or 5,200 operating hours, and a residual value of $22,400. The equipment was used for 1,820 hours during Year 1, 1,092 hours in Year 2, 1,456 hours in Year 3, and 832 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 Year 3 $fill in the…
Comparison of Depreciation Methods P4. Italian Construction Company purchased a new crane for $360,500 at the begin- ning of year 1. The crane has an estimated residual value of $35,000 and an estimated useful life of six years. The crane is expected to last 10,000 hours. It was used 1,800 hours in year 1; 2,000 hours in year 2; 2,500 hours in year 3; 1,500 hours in year 4; 1,200 hours in year 5; and 1,000 hours in year 6. REQUIRED 1. Compute the annual depreciation and carrying value for the new crane for each of the six years under each of the following methods: (a) straight-line, (b) production, and (c) double-declining-balance (round percentage to two decimal places.) 2. If the crane is sold for $250,000 after year 3, what would be the amount of gain or loss under each method? 3. ACCOUNTING CONNECTION ▶ Do the three methods differ in their effect on the company's profitability? Do they differ in their effect on the company's operating cash flows? Explain.
Question: Ivanhoe Enterprises acquired a piece of equipment on January 3, 2005. The total cost of the equipment was $35,000. Ivanhoe estimated that the equipment would be used for 8 years before being sold for an estimated $7,000. Assuming the use of straight-line depreciation, calculate the total depreciation expense for the year ended December 31, 2005.
Calculating Depletion, Depreciation, and Ending Inventory Aerial Company acquired land containing natural resources on January 1 that it planned to extract for $6 million. The amount allocated to the land is $220,000. Surveys estimate that the recoverable resources will total 4 million tons. The company paid an additional $440,000 for development of the mining land to prepare for the extraction of the resources. The company also incurred $220,000 to install mining equipment with a useful life of 8 years. The equipment will not be used for other projects. The company is obligated to restore the site after the extraction of resources. The present value of this obligation is $55,000. The company extracted 528,000 tons of natural resources during the year and 495,000 tons were sold during the year. Required a. Determine depletion for the natural resource during the year. Hint: Equipment cost is accounted for separately and its depreciation is recorded as Depreciation Expense. Numerator /…
None
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $725,600. The equipment was expected to have a useful life of four years, or 10,400 operating hours, and a residual value of $60,000. The equipment was used for 3,640 hours during Year 1, 2,184 hours in Year 2, 2,912 hours in Year 3, and 1,664 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 Year 3 $fill in…
Comparing Three Depreciation Methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $730,400. The equipment was expected to have a useful life of four years, or 10,000 operating hours, and a residual value of $60,400. The equipment was used for 3,800 hours during Year 1, 3,100 hours in Year 2, 1,800 hours in Year 3, and 1,300 hours in Year 4. Required: 1. 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-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each 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. Depreciation Expense Year Straight-Line Method Units-of-Output Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2…
Depreciation by different methods, and sale of a fixed asset New machines were purchased by Nunez Co. on January 1 for $300,000. The equipment was expected to have a useful life of four years and an estimated salvage value of $40,000. Required: 1. Determine the annual depreciation expense for each of the four years under A. The Straight-line method Year 1 $65,000 Year 2 $65,000 Year 3 $65,000 Year 4 $65,000 B. The double-declining balance method Beg. BV DDB% Dep. Exp. End. BV Year 1 300,000 50.0% 150,000 150,000 Year 2 150,000 50.0% 75,000 75,000…
Measuring asset cost, units-of-production depreciation, and asset trade Wimot Trucking Corporation uses the units-of-production depreciation method because units-of-production best measures wear and tear on the trucks. Consider these facts about one Mack truck in the company’s fleet. When acquired in 2015, the rig cost $360,000 and was expected to remain in service for 10 years or 1,000,000 miles. The estimated residual value was $90,000. The truck was driven 80,000 miles in 2015,120,000 miles in 2016, and 160,000 miles in 2017. After 44,000 miles, on March 15, 2018, the company traded in the Mack truck for a less expensive Freightliner. Wimot also paid cash of $20,000. The fair market value of the Mack truck was equal to its net book value on the date of the trade. Requirements Record the journal entry for depreciation expense in 2018. Determine Wimot’s cost of the new truck. Record the journal entry for the exchange of assets on March 15, 2018. Assume the exchange had commercial…