Plant Assets (Depreciation & Disposal) Little Ricky Company, a toy manufacturer, purchased a teddy bear stuffing machine on January 1, 2019 for $265,000. The estimated life of the equipment is five years or 500,000 units. The estimated salvage value is $15,000. The machine produced 120,000 units, in 2019 and 150,000 units in 2020. Part 1: Requirements: Calculate depreciation expense for 2019 and 2020 using: 1.) The straight-line depreciation method 2.) The units-of-production depreciation method 3.) The double-declining-balance depreciation method
Plant Assets (Depreciation & Disposal) Little Ricky Company, a toy manufacturer, purchased a teddy bear stuffing machine on January 1, 2019 for $265,000. The estimated life of the equipment is five years or 500,000 units. The estimated salvage value is $15,000. The machine produced 120,000 units, in 2019 and 150,000 units in 2020. Part 1: Requirements: Calculate depreciation expense for 2019 and 2020 using: 1.) The straight-line depreciation method 2.) The units-of-production depreciation method 3.) The double-declining-balance depreciation method
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Plant Assets (Depreciation & Disposal)
Little Ricky Company, a toy manufacturer, purchased a teddy bear stuffing machine on January 1, 2019
for $265,000. The estimated life of the equipment is five years or 500,000 units. The estimated salvage
value is $15,000. The machine produced 120,000 units, in 2019 and 150,000 units in 2020.
Part 1: Requirements: Calculate depreciation expense for 2019 and 2020 using:
1.) The straight-line depreciation method
2.) The units-of-production depreciation method
3.) The double-declining-balance depreciation method
Show your work! Attach any scratch paper needed.
Part 2: Requirements: On June 30, 2021, the company sells the teddy bear stuffing machine for
$165,000 cash. Little Ricky Company only records depreciation expense annually. Therefore, prepare
any necessary journal entries at June 30, 2021 involved in recording the sale. Assume the company uses
the straight-line method
`depreciation for all plant assets.
Date
Accounts
Debit
Credit
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