LO 11.2 LO 11.6 LO 11.8 Account Balances at January 1, 2019 Debit Credit $ 150,000 1,200,000 AICPA land Adapted Building Accumulated Depreciation Machinery and Equipment Accumulated Depreciation Automotive Equipment Accumulated Depreciation $263,100 900,000 250,000 115,000 84,600 Depreciation Method and Useful Life Building: 150%declining-balance; 25 years. Machinery and equipment: Straight-line; 10 years. Automotive equipment: Sum of the years'digits; 4 years. Leasehold improvements: Straight-line. The residual value of the depreciable assets is immaterial. Depreciation is computed to the nearest month. (continued) Copyrige 0 Cmpge Leming A Righe Roaval. Mag e colod smel.er dulicad ein pat. De o dedseik ghe e t pury c y be reed fhe ok ndie Chutar Bd ies h deed ed te de e kt de rel ggeiene. Cmppe LeeinE reves terirnt otety tiene rig m me 11-54 Chapler 11 Depreciation, Depletion, Impairment, and Disposal Transactions during 2019 and other information were as follows: a. On January 2, 2019, Blake purchased a new car for $10,000 cash and a trade-in of a 2-year-old car with a cost of $9,000 and a book value of $2,700. The new car has a cash price of $12,000; the market value of the trade-in is not known. b. On April 1, 2019, a machine purchased for $23,000 on April 1, 2014, was destroyed by fire. Blake recovered $15,500 from its insurance company. On May 1, 2019, costs of $168,000 were incurred to improve leased office premises. The leaschold improve- ments have a useful life of 8 years. The related lease, which terminates on December 31, 2025, is renewable for an additional 6-year term. The decision to renew will be made in 2025 based on office space needs at that time. d. On July 1, 2019, machinery and equipment were purchased at a total invoice cost of S280,000; additional costs of $5,000 for freight and $25,000 for installation were incurred. Blake determined that the automotive equipment comprising the $115,000 balance at January 1, 2019, would have been depreciated at a total amount of $18,000 for the year ended December 31, 2019. C. e.

LO 11.2 LO 11.6 LO 11.8 Account Balances at January 1, 2019 Debit Credit $ 150,000 1,200,000 AICPA land Adapted Building Accumulated Depreciation Machinery and Equipment Accumulated Depreciation Automotive Equipment Accumulated Depreciation $263,100 900,000 250,000 115,000 84,600 Depreciation Method and Useful Life Building: 150%declining-balance; 25 years. Machinery and equipment: Straight-line; 10 years. Automotive equipment: Sum of the years'digits; 4 years. Leasehold improvements: Straight-line. The residual value of the depreciable assets is immaterial. Depreciation is computed to the nearest month. (continued) Copyrige 0 Cmpge Leming A Righe Roaval. Mag e colod smel.er dulicad ein pat. De o dedseik ghe e t pury c y be reed fhe ok ndie Chutar Bd ies h deed ed te de e kt de rel ggeiene. Cmppe LeeinE reves terirnt otety tiene rig m me 11-54 Chapler 11 Depreciation, Depletion, Impairment, and Disposal Transactions during 2019 and other information were as follows: a. On January 2, 2019, Blake purchased a new car for $10,000 cash and a trade-in of a 2-year-old car with a cost of $9,000 and a book value of $2,700. The new car has a cash price of $12,000; the market value of the trade-in is not known. b. On April 1, 2019, a machine purchased for $23,000 on April 1, 2014, was destroyed by fire. Blake recovered $15,500 from its insurance company. On May 1, 2019, costs of $168,000 were incurred to improve leased office premises. The leaschold improve- ments have a useful life of 8 years. The related lease, which terminates on December 31, 2025, is renewable for an additional 6-year term. The decision to renew will be made in 2025 based on office space needs at that time. d. On July 1, 2019, machinery and equipment were purchased at a total invoice cost of S280,000; additional costs of $5,000 for freight and $25,000 for installation were incurred. Blake determined that the automotive equipment comprising the $115,000 balance at January 1, 2019, would have been depreciated at a total amount of $18,000 for the year ended December 31, 2019. C. e.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 60E

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