Q4: China Beijing Salon purchased new furniture for its store on April 1, 2001. The furniture is expected to have a 5-year life and no residual value. The following expenditures were associated with the purchase: Cost of the furniture.. Freight charges.. Sales taxes. Installation of furniture Cost to repair furniture damaged during installation Rs. 10,000 350 600 50 500 .......* ......... . Instructions a. Determine the cost of the asset to be capitalized. Provide justification. b. Prepare Depreciation Schedule under each depreciation method listed below: 1. Straight-line, with fractional years rounded to the nearest whole month. 2. 200% declining-balance, using the half-year convention. c. Prepare journal entry assuming furniture was disposed of at Rs. 20,000 at the end of useful life.
Q4: China Beijing Salon purchased new furniture for its store on April 1, 2001. The furniture is expected to have a 5-year life and no residual value. The following expenditures were associated with the purchase: Cost of the furniture.. Freight charges.. Sales taxes. Installation of furniture Cost to repair furniture damaged during installation Rs. 10,000 350 600 50 500 .......* ......... . Instructions a. Determine the cost of the asset to be capitalized. Provide justification. b. Prepare Depreciation Schedule under each depreciation method listed below: 1. Straight-line, with fractional years rounded to the nearest whole month. 2. 200% declining-balance, using the half-year convention. c. Prepare journal entry assuming furniture was disposed of at Rs. 20,000 at the end of useful life.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Q4: China Beijing Salon purchased new furniture for its store on April 1, 2001. The furniture is
expected to have a 5-year life and no residual value. The following expenditures were associated with
the purchase:
Cost of the furniture.
Freight charges
Sales taxes.
Rs. 10,000
350
600
Installation of furniture
50
500
Cost to repair furniture damaged during installation
Instructions
Determine the cost of the asset to be capitalized. Provide justification.
b. Prepare Depreciation Schedule under each depreciation method listed below:
1. Straight-line, with fractional years rounded to the nearest whole month.
2. 200% declining-balance, using the half-year convention.
c. Prepare journal entry assuming furniture was disposed of at Rs. 20,000 at the end of useful
life.
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