On, April 1, 2020, S. Products Co. purchased new machinery for $450,000. The machinery has anestimated useful life of eight years and 15,000 salvage value. The company computed the depreciationby the double declining method in 31/03/2022 the company decided to exchange its machinery with newone, in that date the old machine fair market value estimated to$ 270,000. The company will pay$150,000 and the old machine to get the new one (no- commercial substances). The new machine willdepreciate on sum-of-the-years'-digits method with estimated 13000 salvage value and four yearsestimated useful life. In 1/1/2024 the company decided to disposal the machine through donated to localassociation. The company financial is calendar year.Required: Journalize all entries required for the machine from 1//4/2020-1/1/2024

The objective of the question is to journalize all entries required for the machine from April 1,…

Answered: On, April 1, 2020, S. Products Co.…

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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On January 1, 2015, Minco Coportation purchased, for $100,000, equipment having a useful life of the eight years and an estimated salvage value of $4,000. Minco has recorded monthly depreciation of the equipment on the straight-line method. On January 1, 2020, the equipment was sold for $39,000. As a result if this sale, Minco should recognize a. $0 b. a $1,500 gain c. a $1,000 loss d. a $13,000 loss
Bonita Industries purchased a depreciable asset for $591000 on April 1, 2018. The estimated salvage value is $51000, and the estimated total useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, 2021 when the asset is sold? $297000 $333000 $288000 $252000
SIMCO Company purchases a machine on 1/1/2020, at a cost of $24,000. The machine is depreciated using the straight-line method. The machine's useful life is estimated to be 5 years with a $4,000 salvage value. On 1/1/2022, management decides to change the useful life to 7 years, instead of 5 years, and keep salvage value the same.
Dewey Corporation purchased a machine for $340,000 on January 1, 2012. The machine had an estimated useful life of 12 years and an estimated residual value of $40,000. The machine was depreciated using the straight-line method. On April 1, 2021, the company no longer needed the machine and sold it for $80,000. Dewey takes a half-year depreciation for the year an asset is disposed. a. What is the book value of the machine at the end of 2020? b. Calculate and record the depreciation for 2021 in the journal provided. c. Calculate the book value of the machine at the time of sale. d. Record the sale of the machine on April 1 in the journal provided.
Wildhorse Company purchaseda hot tub for $ 11,790 on January 1, 2016. Straight-line depreciation is used, based on a 6-year life and a $ 1,890 salvage value. In 2018, the estimates are revised. Wildhorse now feels the hot tub will be used until December 31, 2020, when it can be sold for $ 885. Compute the 2018 depreciation. Depreciation expense, 2018 %24
On July 1, 2020, Concord Corporation purchased factory equipment for $28300O. Salvage value was estimated to be $7900. The equipment will be depreciated over five years using the double-declining balance method. Counting the year of acquisition as one-half year, Concord should record depreciation expense for 2021 on this equipment of O $58180. O $67920. O $90560. O $113200.
Tinker Bell Company sold a delivery wing truck on March 1, 2022. Tinker had acquired the wing truck on January 1, 2019, for $ 52,000. At acquisition, Tinker had estimated that the truck would have a useful life of 6 years and a residual value of $4,000. On December 31, 2021, the truck had a book value of $ 28,000. Required: Prepare the journal entries to recognized the depreciation expense for 2022 prior to the sale and the sale of the truck assuming the truck sold at the following different prices (you will have 3 entries total): $32,000 26,000
On January 1, 2019, Woodstock, Inc. purchased a machine costing $42.400. Woodstock also paid $2,200 for transportation and installation. The expected useful life of the machine is 6 years and the residual value is $6.200. If Woodstock uses the straight-line depreciation method, which of the following statements is incorrect? Multiple Cholce The December 31, 2020 book value Is$25.600. The annual depreclation expense Is $6.400. The December 31, 2019 book value Is $38.200. The December 31, 2021 accumulated depreclation balance is $19.200,
Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is $4,800. The cost of the building was $96,000. The current book value of the equipment (January 1, 2021) is $81,600. At the time of purchase, the asset was estimated to have a zero salvage value. On January 1, 2021, the company decided to reduce the original useful life by 25% and to establish a salvage value of $4,800. The firm also decided double-declining-balance depreciation was more appropriate. Ignore tax effects. 1. Prepare the journal entry, if any, to report the accounting change under GAAP. 2. Record the annual depreciation for 2021.
Carla Vista Products purchased a machine for $66400 on July 1, 2025. The company intends to depreciate it over 8 years using the double-declining balance method. The salvage value is $6700. Depreciation for 2026 to the closest dollar is $8300. O $33200. O $14525. $13200.
In 2022, Leo construction traded in a light duty pickup truck that had a book value of $18,000. A new pickup truck having a fair market value of $55,236 was acquired. Because the vendor accepted the old truck as a trade-in, a deal was agreed, and Leo construction would only pay $32,405 for the new truck. Compute the third year depreciation (d3) for the new truck using the general depreciation system method.
Popeye Company purchased a machine for $350,000 on January 1, 2020. Popeye depreciates machines of this type by the straight-line method over a five-year period using no salvage value. Due to an error, no depreciation was taken on this machine in 2020. Popeye discovered the error in 2021. What amount should Popeye record as depreciation expense for 2021? The tax rate is 25%. O O O O $105,000. $52,500. $70,000. $140,000.

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