Exercise 8-9A Events related to the acquisition, use, and disposal of a tangible plant asset: straight-line depreciation CJ's Pizza purchased a delivery van on January 1, 2011, for $25,000. In addition, CJ's paid sales tax and title fees of $1,000 for the van. The van is expected to have a four-year life and a salvage value of $6,000. Required a. Using the straight-line method, compute the depreciation expense for 2011 and 2012. b. Prepare the general journal entry to record the 2011 depreciation. c. Assume the van was sold on January 1, 2014, for $12,000. Prepare the journal entry for the sale of the van in 2014. LO 3, 4

Exercise 8-9A Events related to the acquisition, use, and disposal of a tangible plant asset: straight-line depreciation CJ's Pizza purchased a delivery van on January 1, 2011, for $25,000. In addition, CJ's paid sales tax and title fees of $1,000 for the van. The van is expected to have a four-year life and a salvage value of $6,000. Required a. Using the straight-line method, compute the depreciation expense for 2011 and 2012. b. Prepare the general journal entry to record the 2011 depreciation. c. Assume the van was sold on January 1, 2014, for $12,000. Prepare the journal entry for the sale of the van in 2014. LO 3, 4

Name: Exercise 8-9A Events related to the acquisition, use, and disposal of
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Exercise 8-9A Events related to the acquisition, use, and disposal of a tangibleplant asset: straight-line depreciationCJ's Pizza purchased a delivery van on January 1, 2011, for $25,000. In addition, CJ's paid salestax and title fees of $1,000 for

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.6E

See similar textbooks

Related questions

Q: Exercise 8-18 (Algo) Partial-year depreciation; disposal of plant asset LO P2 Rayya Company…

A: Journal Entry :— It is an act of recording transaction in books of account when transaction…

Q: Question Content Area Disposal of Fixed Asset Perfect Auto Rentals sold one of its cars on January…

A: A journal entry refers to a written record of a personal reflection, thought, or experience. It is a…

Q: Problem 5 - Property Plant and Equipment Requirements: Calculate the (A) Cost Basis, (B) Straight…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: Problem 6-28A (Algo) Revision of estimated useful life of tangible assets LO 6-6 Banger Company…

A: Straight-line depreciation evenly spreads the cost of an asset over its useful life, resulting in a…

Q: Assume that Gonzalez Company purchased an asset on January 1, 2014, for $60,000. The asset had an…

A: Depreciation is considered a reduction in the value of assets due to the use of that asset. We can…

Q: Exercise 6-15 (Algo) Depreciation calculation methods LO 6-3 Millco Incorporated acquired a machine…

A: Depreciation expense :— It is the allocation of depreciable cost of asset over the estimated useful…

Q: Problem 8-5A Computing and revising depreclation; selling plant assets LO C2, P1, P2 Yoshi Company…

A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…

Q: Required: 1-a. Calculate depreciation for Year 2. 1-b. Calculate book value and gain (loss) for sale…

A: 1. Total Cost: $20515 + $1785 $22,300 2. [$22,300 - $2150]/5 years $4030

Q: Problem 9-08A (Part Level Submission) In recent years, Sunland Company has purchased three machines.…

A: Straight-line method is one of a simplest method used to calculate depreciation expense on asset,…

Q: QUESTION 15 Freeman Engineering paid $42,000 for specialized equipment for use with their new global…

A: A depreciation scheme used for tax reasons in the United States is the modified accelerated cost…

Q: On January 2, 2018, Skyler, Inc. purchased a laser cutting machine to be used in the fabrication of…

A: Depreciation represents the reduction in the value of the asset over the useful life of the asset.

Q: Depreciation by two methods A Kubota tractor acquired on January 8 at a cost of $65,000 has an…

A: Answer with workings are as follows

Q: Part C. Depreciation On January 2, 2012, Dickens Company purchased a building and land for $740,000.…

A: Given that, The purchase cost of Land and building = $740000 Apprised value of Building = $520000…

Q: Exercise 6-13 (Algo) Depreciation calculation methods LO 3 Millco Inc., acquired a machine that cost…

A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…

Q: Exercise 8-9A (Algo) Computing and recording straight-line versus double-declining-balance…

A: Cost = $180,000 Salvage Value = $30,000 Useful Life = 5 Years

Q: Teal Mountain Inc. purchased a tractor trailer for $152000. Teal Mountain uses the units-of-activity…

A: Depreciation is a reduction value of asset due to wear and tear, technological advancement and due…

Q: Exercise 7-11A Determine depreciation under three methods (LO7-4) [The following information applies…

A: Answer Computation of annual depreciation for the first two years as per Double -Declining- balance…

Q: Exercise 6-11A (Algo) Events related to the acquisition, use, and disposal of a tangible plant…

A: DEPRECIATION EXPENSEDepreciation means gradual decrease in value of assets due to normal wear and…

Q: Speedy Delivery Company purchases a delivery van for $42,400. Speedy estimates that at the end of…

A: Depreciation is defined as the decrease or reduction in the value of the fixed tangible asset…

Q: Required information Problem 8-6A Disposal of plant assets LO C1, P1, P2 [The following information…

A: Depreciation is the reduction in value of asset over the period of time. Under straight line method…

Q: ABC industries bought a machine costing BD 255,000 on 31 December 2012 with value BD 5,000. The…

A: Cost of machine = BD 255,000 Salvage Value = BD 5,000 Estimated useful life = 10 years Annual…

Q: Question 1 On January 1, 2014, Evers Company purchased the following machine for use in its…

A: Depreciation is the gradual reduction in the asset’s value upto its useful life. It can be…

Q: Required: Identify the depreciation method used for each of the following comparative balance sheet…

A: Solution Given Cost 495000 Useful life 4 year Salvage value 86000 Capacity of…

Q: Exercise 6-13 (Algo) Depreciation calculation methods LO 3 Millco Inc., acquired a machine that cost…

A: Straight line depreciation Cost of the asset - residual value / useful life of asse Accumulated…

Q: Exercise 8-5: Assume that Bloomer Company purchased a new machine on January 1, 2016, for $80,000.…

A: Depreciation: A systematic reduction in the value of an asset over its useful life. Residual…

Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

Exercise 8-9A Events related to the acquisition, use, and disposal of a tangible
plant asset: straight-line depreciation
CJ's Pizza purchased a delivery van on January 1, 2011, for $25,000. In addition, CJ's paid sales
tax and title fees of $1,000 for the van. The van is expected to have a four-year life and a salvage
value of $6,000.
Required
a. Using the straight-line method, compute the depreciation expense for 2011 and 2012.
b. Prepare the general journal entry to record the 2011 depreciation.
c. Assume the van was sold on January 1, 2014, for $12,000. Prepare the journal entry for the
sale of the van in 2014.
LO 3, 4

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Exercise 6-11A (Algo) Events related to the acquisition, use, and disposal of a tangible plant asset: Straight-line depreciation LO 6-2, 6-5 City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $21,900. In addition, City paid sales tax and title fees of $1,490 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,890. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. (Round your answers to the nearest whole dollar amount.) b. Assume the auto was sold on January 1, Year 3, for $18,849. Determine the amount of gain or loss that would be recognized on the asset disposal. (Round the intermediate calculations to nearest whole dollar amount.) a. Year 1 Depreciation Year 2 Depreciation b. on sale per year per year
Problem 6-25 (Algo) Identify depreciation methods used LO 3 Grove Co. acquired a production machine on January 1, 2019, at a cost of $495,000. The machine is expected to have a four-year useful life, with a salvage value of $86,000. The machine is capable of producing 56,000 units of product in its lifetime. Actual production was as follows: 12,320 units in 2019; 17,920 units in 2020; 15,680 units in 2021; 10,080 units in 2022. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset’s life, using three alternative depreciation methods (items a–c): Required: Identify the depreciation method used for each of the following comparative balance sheet presentations (items a–c). If a declining-balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the balance sheet from right to left to determine how much has been depreciated each year. Remember that December 31, 2019, is…
Exercise 8-6: Assume that Gonzalez Company purchased an asset on January 1, 2014, for $60,000. The asset had an estimated life of six years and an estimated residual value of $6,000. The company used the straight-line method to depreciate the asset. On July 1, 2016, the asset was sold for $40,000. Make the journal entry to record depreciation for 2016. Record all transactions necessary for the sale of the asset. How should the gain or loss on the sale of the asset be presented on the income statement?
Part C. Depreciation On January 2, 2012, Dickens Company purchased a building and land for $740,000. The most recent appraisal values for the building and the land are $520,000 and $280,000, respectively. The building has an estimated useful life of 20 years and a salvage value of $60,000. 1. Assuming cash transactions and straight-line depreciation, prepare journal entries to record: a. Purcase of the building and land on January 2, 2012. b. Depreciation expense on December 31, 2012. 2. Assume that after four years the land and building were sold for $585,000. Prepare the journal entry to record the sale.
ra1
pvn.3
Question Three : ABC industries bought a machine costing BD 255,000 on 31 December 2012 with a salvage value BD 5,000. The machine has a useful life of 10 years as per the technical team report. The company decided to sold the machine on July 1, 2020 for BD 100,000. Required: 1. Prepare the journal entry to record the update depreciation to July 1, 2020. 2. Prepare the journal entry to record the machine's disposal.
IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.
When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.
(Appendix 11.1) Auburn Company purchased an asset on January 1, Year 1, for 150,000. The asset has a MACRS life of 7 years. The residual value of the asset is 35,000. Calculate the depreciation expense for Year 1 and Year 2 using MACRS.
Choice Among Depreciation Methods Walnut Ridge Production Inc. purchased a new computerized video editing machine at a cost of $450,000. The System has a residual value of $64,000 and an expected life of 5 years. Required: 1. Compute depreciation expense, accumulated depreciation, and book value for the first 3 years of the machines life using the (a) straight-line method and (b) double-declining-balance method. 2. Which method would produce the largest income in the first, second, and third years of the assets life? 3. CONCEPTUAL CONNECTION Why might the controller of Walnut Ridge Production be interested in the effect of choosing a depreciation method? Evaluate the legitimacy of these interests.
DEPLETION: CALCULATING AND JOURNALIZING Mineral Works Co. acquired a salt mine at a cost of 1,700,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,400,000 tons. (a) During the first year, 200,000 tons are mined and sold. (b) During the second year, 600,000 tons are mined and sold. REQUIRED 1. Calculate the amount of depletion expense for both years. 2. Prepare general journal entries for depletion expense.