On January 1, 2024, Canseco Plumbing Fixtures purchased equipment for $38,000. Residual value at the end of an estimated 7year service life is expected to be $10,000. The company expects the equipment to operate for 12,000 hours.Required:a. Calculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchasedon January 1, 2024.b. Calculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchasedon March 31, 2024.Complete this question by entering your answers in the tabs below.Required ARequired BCalculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchased onJanuary 1, 2024.Sum-of-the-years' digits depreciation20242025DepreciableBasexRate perYear=DepreciationExpensexx=< Required ARequired B >

Step 1: Sum of the years' digits method For the sum of the years' digits method, you'll have to get…

Answered: On January 1, 2024, Canseco Plumbing…

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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Burger Chef acquired a delivery truck on March 1, 2021, for $31,600. The company estimates a residual value of $2,400 and a six-year service life. It expects to drive the truck 73,000 miles. Actual mileage was 10,700 miles in 2021 and 14,600 miles in 2022. Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do not round intermediate calculations.) Depreciation Expense Year 2021 2022
Mountain View Resorts purchased equipment at the beginning of 2021 for $40,000. Residual value at the end of an estimated four- year service life is expected to be $8,200. The machine operated for 1,900 hours in the first year and the company expects the machine to operate for a total of 11,000 hours over its four-year life. Calculate depreciation expense for 2021, using each of the following depreciation methods: (1) straight-line, (2) double-declining- balance, and (3) activity-based. (Round your intermediate calculations to 2 decimal places.) Depreciation Expense Straight-line Double-declining-balance Activity-based
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On January 2, 2021, Morales Paint Company purchased a truck that cost $60,000 with a residual value of $2,500. The expected useful life of the truck is 4 years and 100,000 miles. It is expected to be driven 13,000 miles in the first year; 40,000 miles the second year; 27,000 miles in the third year and 20,000 miles in the fourth year. A. Prepare a depreciation schedule for the asset’s entire useful life using each of the following methods: Straight Line Production (Units of Production) Double Declining Balance B. Prepare the journal entry to record depreciation expense for year 2 for each of the Depreciation Methods (a total of 3 journal entries). C. Assume that the company decided to sell the equipment in year 3 for $15,000 in cash. Prepare the required journal entry for each of the Depreciation Methods (a total of 3 journal entries).
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