(QS) PPE (Various)On January 2, 20x0, Chegal Ltd. purchased equipment for $100,000. Chegal had to spend anadditional $10,000 for transportation and $15,000 for installation of the equipment. Assume thatall of these were paid in cash. The equipment is expected to produce a total of 100,000 widgetsover its life of 5 years. The residual value expected at the end of 5 years is $25,000. During20x0, Chegal produced 19,000 widgets.Required -Prepare the journal entry to record the acquisition of the equipment on January 2, 20x0.Prepare the journal entry at December 31, 20x0 to record the depreciation using the units-of-production method.Items c, d and e do not require journal entriesAssume Chegal uses the straight-line method of depreciation. Calculate the depreciationexpense for the year ended December 31, 20x0.Assume Chegal uses the diminishing balance method of depreciation at a rate of 40%.Calculate the depreciation expense for the year ended December 31, 20x0, 20x1, 20x2and 20x3.a.b.C.d.e.Assume that the straight-line method is used and that the equipment is disposed of onDecember 31, 20x2 for $52,000. Calculate the gain or loss on disposal on sale ofequipment. Depreciation expense for the year ended December 31, 20x2 has beenrecorded.

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On January 2, 20x0, Chegal Ltd. purchased equipment for $100,000. Chegal had to additional $10,000 for transportation and $15,000 for installation of the equipment. Assume that all of these were paid in cash. The equipment is expected to produce a total of 100,000 widgets over its life of 5 years. The residual value expected at the end of 5 years is $25,000. During 20x0, Chegal produced 19,000 widgets. Required - a. b. Prepare the journal entry to record the acquisition of the equipment on January 2, 20x0. Prepare the journal entry at December 31, 20x0 to record the depreciation using the units- of-production method.

On January 2, 20x0, Chegal Ltd. purchased equipment for $100,000. Chegal had to additional $10,000 for transportation and $15,000 for installation of the equipment. Assume that all of these were paid in cash. The equipment is expected to produce a total of 100,000 widgets over its life of 5 years. The residual value expected at the end of 5 years is $25,000. During 20x0, Chegal produced 19,000 widgets. Required - a. b. Prepare the journal entry to record the acquisition of the equipment on January 2, 20x0. Prepare the journal entry at December 31, 20x0 to record the depreciation using the units- of-production method.

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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