406Part Three Accounting SEXERCISE 11-11ENTRIES FOR SALE OFPLANT ASSETA piece of equipment acquired on January 3, 1991, at a cost of $57,500, has an estiuseful life of 5 years, an estimated residual value of $7,500, and is depreciatedstraight-line method.Objective 7a. What was the book value of the equipment at December 31, 1994, the end of the fciyear?b. Assuming that the equipment was sold on July 1, 1995, for $9,000, journalize the emácto record (1) depreciation for the six months of the 'curfent year ending December1995, and (2) the sale of the equipment.WEXERCISE 11-12DISPOSAL OF PLANT ASSETObjective 7A piece of equipment acquired on January 3, 1991, at a cost of $25,000, has an estimuseful life of 4 years and an estimated residual value of $5,000.a. What was the annual amount of depreciation for the years 1991, 1992, and 1993, usathe straight-line method of depreciation?b. What was the book value of the equipment on January 1, 1994?c. Assuming that the equipment was sold on January 2, 1994, for $8,500, joumalizaentry to record the sale.d. Assuming that the equipment had been sold for $11,500 on January 2, 1994, instea n$8,500, journalize the entry to record the sale.EXERCISE 11-13ENTRIES FOR LOSS ONTRADE OF PLANT ASSETObjective 7On July 1, Lewis Co. acquired a new computer with a list price of $125,000. Lewis receiveltrade-in allowance of $15,000 on an old computer of a similar type, paid cash of $30,00gave a series of five notes payable for the remainder. The following information about the ikcomputer is obtained from the account in the office equipment ledger: cost, $82,500; amlated depreciation on December 31, the end of the preceding fiscal year, $50,000; annual dpreciation, $15,000. Journalize the entries to record: (a) the current depreciation of the olcomputer to the date of trade-in, (b) the transaction on July 1 for financial reporting purpoesEXERCISE 11-14On July 1, Klaus Co. acquired a new computer with a list price of $130,000. Klaus recereitrade-in allowance of $20,000 on an old computer of a similar type, paid cash of $20,00gave a series of five notes payable for the remainder. The following information abouk the acomputer is obtained from the account in the office equipment ledger: cóst, $82,500; acumlated depreciation on December 31, the end of the preceding fiscal year, $62,500; ánnuapreciation, $15,000. Journalize the entries to record: (a) the current depreciation of thecomputer to the date of trade-in, (b) the transaction on July 1 for financial reporting purpoENTRIES FOR GAIN ONTRADE OF PLANT ASSETObjective 7EXERCISE 11-15acclDEPRECIATION ON ASSETACQUIRED BY EXCHANGEObjective 7On the first day of the fiscal year, a delivery truck with a list price of $30,000 was acoiin exchange for an old delivery truck and $26,000 cash. The old truck had a book väl$2,500 at the date of the exchange. The new truck is to be depreciated over 5 years bstraight-line method. The estimated residual value is $2,000.a. Determine the following:1. Annual depreciation for financial reporting purposes.2. Annual depreciation for income tax purposes:b. Assuming that the book value of the old delivery truck was $5,000, determine thelowing:1. Annual depreciation for financial reporting purposes.2. Annual depreciation for income tax purposes.Programs Co. is a computer software company marketing software products in the lStates and Canada. While Programs Co. has over 30 sales offices, all accounting is handat the company's headquarters in Dayton, Ohio.Programs Co. keeps all its plant asset records on a computerized system. The compmaintains a subsidiary ledger of all plant assets owned by the company and calculalespreciation automatically. Whenever a manager at one of the thirty sales offices wandpurchase a plant asset, a purchase request is submitted to headquarters for approval. Uponapproval, the plant asset is purchased and the invoice is sent back to headquarters so tEXERCISE 11-16INTERNAL CONTROL OFPLANT ASSETSObjective 9

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EXERCISE 11-11 ENTRIES FOR SALE OF PLANT ASSET A piece of equipment acquired on January 3, 1991, at a cost of $57,500, has an esti useful life of 5 years, an estimated residual value of $7,500, and is depreciated straight-line method. Objective 7 a. What was the book value of the equipment at December 31, 1994, the end of the ic year? b. Assuming that the equipment was sold on July 1, 1995, for $9,000, journalize the anti to record (1) depreciation for the six months of the 'curfent year ending December 1995, and (2) the sale of the equipment.

EXERCISE 11-11 ENTRIES FOR SALE OF PLANT ASSET A piece of equipment acquired on January 3, 1991, at a cost of $57,500, has an esti useful life of 5 years, an estimated residual value of $7,500, and is depreciated straight-line method. Objective 7 a. What was the book value of the equipment at December 31, 1994, the end of the ic year? b. Assuming that the equipment was sold on July 1, 1995, for $9,000, journalize the anti to record (1) depreciation for the six months of the 'curfent year ending December 1995, and (2) the sale of the equipment.

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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QUESTION 7 Equipment costing $70,000 with a salvage value of $14,000 and an estimated life of eight years has been depreciated using the straight-line method for two years. Assuming a revised estimated total life of five years and no change in the salvage value, the depreciation expense for year three would be $14,000. $11,200. $ 8,400. $18,667.
chapter 9 question 5 fill in all the blanks that need to be filled
Font Paragraph Styles Dictate Sensitivity Editor 10 11 14 15 16 17 Part A: London Corp.Company purchased equipment in 2021 for $100,000 and estimated an $10,000 residual value at the end of the equipment's 10-year useful life. At December 31, 2027, there was $63,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2028, the equipment was sold for $28,500. Required Part A: a) Prepare the appropriate journal entries to update depreciation and then to remove the equipment from the books of Lui Company on March 31, 2028. Part B: Gagne Company sold a delivery truck for $14,000. The delivery truck originally cost $26,000 in 2021 and $4,000 was spent on a major overhaul in 2027 (charged to Delivery Truck account). Accumulated Depreciation on the delivery truck to the date of disposal was $16,000. Required Part B: Prepare the appropriate journal entry to record the disposition of the delivery truck. Part C: Campbellford…
Question 3It is now March 31, 2008, and you are contemplating the disposal of an old piece of equipment. The equipment cost $36,000 and has accumulated depreciation of $20,000 at December 31 of the prior calendar year-end. The equipment is being depreciated over 10 years down to a residue of $6,000Record the sale of the equipment at March 31, 2008 assuming:a) The equipment is discardedb) The equipment is sold for $6,000, $10,000 or $20, 000.c) The equipment is exchanged for new, similar equipment having a cost of $42,000. Trade-in-Allowance for the old equipment is $18,000.Question 4On January 1, 20X2, The GenKota Winery purchased a new bottling system. The system has an expected life of 5 years. The system cost $325,000. Shipping, installation, and set up were an additional $35,000. At the end of the useful life, Julie Hayes, chief accountant for GenKota, expects to dispose of the bottling system for $26,000. She further anticipates total output of 668,000 bottles over the useful…
"PR 10-2AComparing three depreciation methodsOBJ. 2Dexter Industries purchased packaging equipment on January 8 for $72,000. The equip-ment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3.Instructions1.Determine the amount of depreciation expense for the three 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 three years by each method. The following columnar headings are suggested for recording the depreciation expense amounts:Depreciation ExpenseYearStraight- Line MethodUnits-of- Activity MethodDouble-Declining- Balance Method2.What method yields the highest depreciation expense for Year 1?3.What method yields the most depreciation over the three-year life of the equipment"
Question 5 The intangible asset of Goodwill: O A. Is amortized over a period of 20 years using the units-of-production method. O B. May be amortized using either the straight-line or units-of-production method. O C. Is amortized over a period of 20 years using the Straight-Line method. O D. Is not amortized, but is tested annually for impairment.
Question 15 of 17 Current Attempt in Progress Blue Spruce Corp. uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions occurred during 2022. Purchased equipment from the Kingbird, Inc. for $35,000 plus sales tax of 53.150 and shipping costs of $630. Jan. May 13 Incurred $392 routine maintenance on the equipment. Dec. 31 Recorded 2022 depreciation on the basis of a 3-year life and estimated salvage value of $13.580. Prepare the necessary entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit
Brief Exercise 8-5 (Algo) Effect of the disposal of plant assets on the financial statements LO 8-5 Mix & Match Company sold office equipment with a cost of $48,600 and accumulated depreciation of $33,000 for $28,000 cash. Required: a. What is the amount of gain or loss on the disposal? b. How would the sale affect net income (increase, decrease, no effect)? c. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect)? d. How would the event affect the statement of cash flows (inflow, outflow, no effect)? a. b. Effect of sale on net income c. Effect of sale on total assets d. Effect of sale on statement of cash flows
EX 10-9 Depreciation by two methods OBJ.2 A computer system acquired on January 1 at a cost of $35,000 has an estimated useful life of five years. Assuming that it will have no residual value, determine the depreciation for each of the first two years (a) by the straight-line method and (b) by the double-declining. balance method.
Question 12-rerror and change estimate Gloria Company purchased a machine on January 1, 2021. Gloria paid $6,000 to the seller for installing the machine and charged the cost to repair expense. The purchase price along with the insurance fee and transportation fee on this machine of $33,000 were recorded as machine and have been depreciated using the straight-line method with an estimated life of 10 years and- no residual value. At December 31, 2021, the company decided to change the remaining useful · life to be 12 years, starting with January 1, 2022. Requirede Show the entries that Gloria should make to correct its error in 2022, assuming the book has not been closed and depreciation expense has not yet been recorded for 2022. Gloria reported correct tax payment in its tax returns. Tax rate is 35% for both years.
Exercise 8-10A Double-declining-balance and units-of-production depreciation: gain or loss on disposal LO 8-3, 8-4 (The following information applies to the questions displayed below.) Exact Photo Service purchased a new color printer at the beginning of Year 1 for $35,350. The printer is expected to have a four-year useful life and a $3,800 salvage value. The expected print production is estimated at $1,773,800 pages. Actual print production for the four years was as follows: 554,300 484,000 377,200 387,300 Year 1 Year 2 Year 3 Year 4 Total 1,802,800 The printer was sold at the end of Year 4 for $4,050. Exercise 8-10A Part b b. Compute the depreciation expense for each of the four years, using units-of-production depreciation. (Round cost per unit to three decimal places and final answers to the nearest whole dollar amount.) Depreciation Expense Year 1 Year 2 Year 3 Year 4 24 Total accumulated depreciation