Required information [The following information applies to the questions displayed below] On January 1, Speedy Delivery Company purchases a delivery van for $38,400. Speedy estimates that at the end of its four-year service life, the van will be worth $6,200. During the four-year period, the company expects to drive the van 201,250 miles. Actual miles driven each year were 52,000 miles in year 1 and 58,000 miles in year 2 Required: Calculate annual depreciation for the first two years using each of the following methods. (Do not round your intermediate calculations.) 3. Activity-based

Required information [The following information applies to the questions displayed below] On January 1, Speedy Delivery Company purchases a delivery van for $38,400. Speedy estimates that at the end of its four-year service life, the van will be worth $6,200. During the four-year period, the company expects to drive the van 201,250 miles. Actual miles driven each year were 52,000 miles in year 1 and 58,000 miles in year 2 Required: Calculate annual depreciation for the first two years using each of the following methods. (Do not round your intermediate calculations.) 3. Activity-based

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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Required information Skip to question [The following information applies to the questions displayed below.]Speedy Delivery Company purchases a delivery van for $36,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,400. During the four-year period, the company expects to drive the van 148,000 miles. Actual miles driven each year were 40,000 miles in year 1 and 46,000 miles in year 2. Required: Calculate annual depreciation for the first two years of the van using each of the following methods. (Do not round your intermediate calculations.) 1. Straight-line. year Anual depreciation 1 2
AU Removals’ financial year ends on 30 June each year. On 1 July 2019, AU Removals purchased a truck for $168,000. You are the accountant of the business and you have estimated that the truck is to last 15 years and to have $7,000 residual value at that point. As per the business plan, the truck can be used to drive 350,000 kilometres over the 15 years, with per-year projections of 21,000 km, 28,000 km, 25,200 km, respectively over the first three years. Suppose that, on 1 July 2021, the truck is sold for $135,000 in cash. Assuming the straight-line method is used, record the transaction in the general journal.
Rae Company purchaseda new vehicle by paying $10,500 cash on the purchase date and agreed to pay $3,500 every three months during the next five years. The first payment is due three months after the purchase date. Rae's incremental borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $10,500 payment was made, is closest to: (EV of $1, PV of $1. FVA of $1, and PVA of$) (Use appropriate factor(s) from the tables provided.) Multiple Cholce $80,500. $52,071. $70,000. $62,571.
AU Removals’ financial year ends on 30 June each year. On 1 July 2019, AU Removals purchased a truck for $168,000. You are the accountant of the business and you have estimated that the truck is to last 15 years and to have $7,000 residual value at that point. As per the business plan, the truck can be used to drive 350,000 kilometres over the 15 years, with per-year projections of 21,000 km, 28,000 km, 25,200 km, respectively over the first three years. Required: Calculate the accumulated depreciation balance at the end of the second year using each of the following depreciation bases. Show your workings. Your calculations should be rounded to the nearest whole number dollar amount. 1. straight-line diminishing balance (19 per cent rate) units-of-production.
Hartman Delivery Service purchased a new delivery truck for $29,000. At the time of purchase, Hartman made a 20% down payment and financed the rest with a 3-year note. Which of the following is the appropriate journal entry for this transaction ?
Libby Company purchased equipment by paying $5,500 cash on the purchase date and agreed to pay $5,500 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 6%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $44,000. $44,108. $49,500. $38,608.
On January 2, 2018, Quick Delivery Service purchased a truck at a cost of $95,000. Before placing the truck in service, Quick spent $2,200 painting it, $1,500 replacing tires, and $10,300 overhauling the engine. The truck should remain in service for five years and have a residual value of $10,000. The truck's annual mileage is expected to be 26,000 miles in each of the first four years and 19,750 miles in the fifth year-123,750 miles in total. In deciding which depreciation method to use, Carl Thomas, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the requirements Requirement 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. Begin by preparing a depreciation schedule using the straight-line method. Straight-Line Depreciation Schedule 1 Requirements - X Depreciation…
Libby Company purchased equipment by paying $5,600 cash on the purchase date and agreed to pay $5,600 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 8%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)
On January 1, the Matthews Band pays $66.600 for sound equipment. The banc estimates it will use this cquipment for five years and perform 200 concerts. It estimates that after five years it can sell the equipment for S2,000. During the first year, the band performs 55 concerts. omnuto the firstrear depreriation using the units-of-production method.
Triton Limited purchases a new delivery truck for $80,000. The insurance cost during transit from the motor vehicle dealer to Triton is $3,000. The logo of the company is painted on the side of the truck for $500. The recurring annual truck registration is $700 and a 12 month accident insurance policy is $1,100. The truck undergoes the initial safety testing to make sure it is road worthy for the first time is $330. What does Triton Limited record as the cost of the new truck? Select the one correct answer: O $85,630. O $80,000. O $83,830. O $83,000.
The company manufactures a line of equipment which it sells to wholesalers. The company sold 5,000 items of this type this year, which also has a one-year guarantee if the equipment fails. Based on past experience, 10% of items sold are returned for repair. The estimated repair cost is OMR 150. What should be the value of provisions to be made? O a. OMR 75,000. O b. OMR 150. O C. OMR 500. O d. OMR 750,000.
The year-end is December 31 for all questions. Question 1 On January 1, 2018 a Silver Mining Corp purchased a large mining truck for $754,500. The manufacturer advertise that the trucks normally will last for 10 years. Sliver plans on using the truck for only 4 years, after which they will likely be sold for scrap $5,000. During the year, the following transactions also occurred: January 1, 2018: Paid S15,000 to have the truck delivered to the mining site, • January 1, 2018: paid $9,000 in import duties. • January 1, 2018: Paid S1,500 to have company logo painted on side of the truck. • January 1, 2018: Paid $4,500 to have extra safety lights installed. • January 1, 2018: Paid $2,000 for repairs to the truck, and S10,000 in repairs to a building. The cause of the damage was driver error. (The driver confused reverse and forward) Required: Show all of the journal entries for 2018, including depreciation expense.