Obj. 2 PR 9-2A Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment 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. Instructions 1. 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 (Continued)

Obj. 2 PR 9-2A Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment 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. Instructions 1. 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 (Continued)

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

w Show Me How Print Item Question Content Area Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $393,800. The equipment was expected to have a useful life of four years, or 8,400 operating hours, and a residual value of $32,600. The equipment was used for 2,940 hours during Year 1, 1,764 hours in Year 2, 2,352 hours in Year 3, and 1,344 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…
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $667,000. The equipment was expected to have a useful life of four years, or 6,800 operating hours, and a residual value of $55,000. The equipment was used for 2,380 hours during Year 1, 1,428 hours in Year 2, 1,904 hours in Year 3, and 1,088 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…
Required information Problem 8-6A Disposal of plant assets LO C1, P1, P2 Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.
Exercise 8-15A (Algo) Revision of estimated useful life LO 8-7 On January 1, Year 1, Poultry Processing Company purchased a freezer and related installation equipment for $69,300. The equipment had a three-year estimated life with a $4,800 salvage value. Straight-line depreciation was used. At the beginning of Year 3, Poultry Processing revised the expected life of the asset to four years rather than three years. The salvage value was revised to $3,800. Required Compute the depreciation expense for each of the four years, Year 1-Year 4. Depreciation Expense Year 1 Year 2 Year 3 Year 4
Exercise 6-14A (Algo) Revision of estimated useful life LO 6-2, 6-6 On January 1, Year 1, Poultry Processing Company purchased a freezer and related installation equipment for $62,100. The equipment had a three-year estimated life with a $3,300 salvage value. Straight-line depreciation was used. At the beginning of Year 3, Poultry Processing revised the expected life of the asset to four years rather than three years. The salvage value was revised to $2,300. Required Compute the depreciation expense for each of the four years, Year 1 to Year 4. Year 1 Year 2 Year 3 Year 4 Depreciation Expense
88
Exercise 8-19A (Static) Computing and recording depletion expense LO 8-9 Colorado Mining paid $600.000 to acquire a mine with 40.000 tons of coal reserves. The financial statements model in Required B reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 15.000 tons of coal in year 1 and 18.000 tons in year 2 Required: a. Compute the depletion charge per ton b. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model Complete this question by entering your answers in the tabs below. Required A Required 8 Compute the depletion charge per ton person Cesta Required>
None
4
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.
QUESTION 32 Vaughn Company purchases equipment on January 1, Year 1, at a cost of $518,000. The asset is expected to have a service life of 12 years and a salvage value of $50,000. Instructions (a) Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (b) Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years’- digits method. (c) Compute the amount of depreciation for each of Years 1 through 3 using the double-declining balance method. (In performing your calculations, round constant percentage to the nearest one hundredth of a point and round answers to the nearest dollar.)
406 Part Three Accounting S 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 fci year? b. Assuming that the equipment was sold on July 1, 1995, for $9,000, journalize the emác to record (1) depreciation for the six months of the 'curfent year ending December 1995, and (2) the sale of the equipment. WEXERCISE 11-12 DISPOSAL OF PLANT ASSET Objective 7 A piece of equipment acquired on January 3, 1991, at a cost of $25,000, has an estim useful 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, usa the straight-line method of depreciation? b. What was the book value of the equipment on January 1, 1994? c. Assuming that the…