Pool Corporation, Incorporated, is the world's largest wholesale distributor of swimming pool supplies and equipment. Assume Pool Corporation purchased for cash new loading equipment for the warehouse on January 1 of Year 1, at an invoice price of $75,600. It also paid $3,800 for freight on the equipment, $3,100 to prepare the equipment for use in the warehouse, and $1,100 for insurance to cover the equipment during operation in Year 1. The equipment was estimated to have a residual value of $5,100 and be used over three years or 25,800 hours. Required: 1. Record the purchase of the equipment, freight, preparation costs, and insurance on January 1 of Year 1. 2. Create a depreciation schedule assuming Pool Corporation uses the straight-line method. 3. Create a depreciation schedule assuming Pool Corporation uses the double-declining-balance method. 4. Create a depreciation schedule assuming Pool Corporation uses the units-of-production method, with actual production of 8,600 hours in Year 1; 8,000 hours in Year 2; and 9,200 hours in Year 3. 5. On December 31 of Year 2 before the year-end adjustments, the equipment was sold for $25,200. Record the sale of the equipment assuming the company used the straight-line method.

Pool Corporation, Incorporated, is the world's largest wholesale distributor of swimming pool supplies and equipment. Assume Pool Corporation purchased for cash new loading equipment for the warehouse on January 1 of Year 1, at an invoice price of $75,600. It also paid $3,800 for freight on the equipment, $3,100 to prepare the equipment for use in the warehouse, and $1,100 for insurance to cover the equipment during operation in Year 1. The equipment was estimated to have a residual value of $5,100 and be used over three years or 25,800 hours. Required: 1. Record the purchase of the equipment, freight, preparation costs, and insurance on January 1 of Year 1. 2. Create a depreciation schedule assuming Pool Corporation uses the straight-line method. 3. Create a depreciation schedule assuming Pool Corporation uses the double-declining-balance method. 4. Create a depreciation schedule assuming Pool Corporation uses the units-of-production method, with actual production of 8,600 hours in Year 1; 8,000 hours in Year 2; and 9,200 hours in Year 3. 5. On December 31 of Year 2 before the year-end adjustments, the equipment was sold for $25,200. Record the sale of the equipment assuming the company used the straight-line method.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5EB: Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of...

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