Recording Entries Using Composite Depreciation Method California Utilities owns a power plant that consists of the following assets, all acquired on January 1. Estimated Estimated Residual Value Life (Years) $18,000 30 10 6 Building Machinery Asset 171,000 Other equipment 90,000 a. Cost $540,000 Required a. Compute the total straight-line depreciation for the first year on all items combined. b. Compute the composite depreciation rate (based on cost) and the composite life. c. Provide the entry to record composite depreciation for the first year. d. Assume that all of the Other equipment was sold three years later for $10,800 cash. Prepare the entry for the sale of that equipment. Note: Round answers to the nearest whole dollar. Straight-Line Depreciation Expense Building Machinery b. C. Other Equipment Total depreciation expense for Year 1 $ Composite depreciation rate $ Composite life (in years) $ 0 9,000 Numerator Composite depreciation rate x $ 0x $ 0 0/$ 0/$ 0 0 Denominator 0= 0 = + = Year 1 Depreciation Exp. 0 = $ 0

Recording Entries Using Composite Depreciation Method California Utilities owns a power plant that consists of the following assets, all acquired on January 1. Estimated Estimated Residual Value Life (Years) $18,000 30 10 6 Building Machinery Asset 171,000 Other equipment 90,000 a. Cost $540,000 Required a. Compute the total straight-line depreciation for the first year on all items combined. b. Compute the composite depreciation rate (based on cost) and the composite life. c. Provide the entry to record composite depreciation for the first year. d. Assume that all of the Other equipment was sold three years later for $10,800 cash. Prepare the entry for the sale of that equipment. Note: Round answers to the nearest whole dollar. Straight-Line Depreciation Expense Building Machinery b. C. Other Equipment Total depreciation expense for Year 1 $ Composite depreciation rate $ Composite life (in years) $ 0 9,000 Numerator Composite depreciation rate x $ 0x $ 0 0/$ 0/$ 0 0 Denominator 0= 0 = + = Year 1 Depreciation Exp. 0 = $ 0

Name: Recording Entries Using Composite Depreciation MethodCalifornia Utili
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Recording Entries Using Composite Depreciation MethodCalifornia Utilities owns a power plant that consists of the following assets, all acquired on January 1.BuildingMachineryAsset171,000Other equipment 90,000a.Cost$540,000Requireda. Compute the tot

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Cost of asset: $120,000, purchased on the first day of Year 1. Estimated Useful life: 7 years Estimated Total Units of activity : 10,000 units Estimated Salvage value: $ 15,000 Units of Production in Year 1 : 2000 units The company adpoted straight line method for depreciation, the asset was disposed on the first day of Year 3 for $93,000. Gain on disposal:$______________
Subject: acounting
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $240,200. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $19,800. The equipment was used for 2,660 hours during Year 1, 1,596 hours in Year 2, 2,128 hours in Year 3, and 1,216 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the three years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining- balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Double-Declining- Year Straight-Line Method Method Balance Method Year 1 Year 2 $ $ $ Year 3 $ Year 4 $ $ Total $ $ $ 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year…
Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $331,200 has an estimated useful life of 10 years and an estimated residual value of $43,200. a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation? Year Year 1 Year 2 Year 3 b. What was the book value of the equipment on January 1 of Year 4? Depreciation Expense c. Assuming that the equipment was sold on January 3 of Year 4 for $232,600, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Jan. 3 d. Assuming that the equipment had been sold on January 3 of Year 4 for $249,700 instead of $232,600, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Jan. 3
Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $375,000 has an estimated useful life of 20 years and an estimated residual value of $25,000. a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation?
Computer equipment was acquired at the beginning of the year at a cost of $48,125 that has an estimated residual value of $2,900 and an estimated useful life of 5 years. a. Determine the depreciable cost. 2$ b. Determine the double-declining-balance rate. % c. Determine the double-declining-balance depreciation for the first year. $
Comparing three depreciation methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $357,600. The equipment was expected to have a useful life of 4 years, or 8,000 operating hours, and a residual value of $29,600. The equipment was used for 3,000 hours during Year 1, 2,500 hours in Year 2, 1,400 hours in Year 3, and 1,100 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the 4 years by each method.Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then, round the answer for each year to the nearest whole dollar. Year Straight-LineMethod Units-of-ActivityMethod Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3…
Comparing three depreciation methodsDexter Industries purchased packaging equipment on January 8, Year 1, for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3.Instructions1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, and Year 3 by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. The following columnar headings are suggested for recording the depreciation expense amounts: -Depreciation Expense- year straight-line method units of output method double-declining balance method
Equipment acquired on January 2, Year 1, at a cost of $525,000 has an estimated useful life of eight years and an estimated residual value of $45,000. Required: 1. What is the annual amount of depreciation for the first three years, assuming the straight-line method of depreciation is used? Depreciation Expense Year 1 $fill in the blank 3b987ff9206ffcf_1 Year 2 $fill in the blank 3b987ff9206ffcf_2 Year 3 $fill in the blank 3b987ff9206ffcf_3 2. What is the book value of the equipment on January 1, Year 4?$fill in the blank 3b987ff9206ffcf_4 3. Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Cash Cash Accumulated Depreciation-Equipment Accumulated Depreciation-Equipment Loss on Sale of Equipment Loss on Sale of Equipment Equipment Equipment 4. Assuming that the equipment is sold on…
A truck acquired at a cost of $435,000 has an estimated residual value of $26,900, has an estimated useful life of 53,000 miles, and was driven 4,200 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The Depreciable Cost $fill in the blank 1 (b) The Depreciation Rate $fill in the blank 2 per mile (c) The Units-of-activity Depreciation for the Year $fill in the blank 3
Records show the following information for a plant asset purchased on October 1 of Year 1. Cost $ 330,000 Salvage Value $ 39,000 Purchase Date October 1 Useful Life 6 years Calculate depreciation expense for Year 1 and Year 2 for the year ended December 31. Depreciation expense for Year 1 for the year ended December 31 Depreciation Method Straight-line Depreciation expense for Year 2 for the year ended December 31
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $171,000. The equipment was expected to have a useful life of four years, or 5,600 operating hours, and residual value of $14,200. The equipment was used for 1,960 hours during Year 1, 1,176 hours in Year 2, 1,568 hours in Year 3, and 896 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Double-Declining- Year Straight-Line Method Method Balance Method Year 1 Year 2 Year 3 Year 4 Total