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Ron Swanson owns Swanson’s Woodcraft Connection, a store dedicated to woodworking tools, supplies, and design plans. On May 1, Year One, Swanson’s purchased a new warehouse to store additional inventory to help meet customer demand. Ron paid $50,000 for the warehouse and estimates that it will be used for twenty years. Salvage value is $5,000 and Swanson uses the straight-line method of depreciation. Swanson’s Woodcraft Connection has a December 31st year-end. What is the amount of depreciation to be taken in Year One?     The amount of depreciation to be taken in Year One is: $  Question 2     The amount of depreciation to be taken in Year Two is:$    Question 3 Now, assume that Swanson’s Woodcraft Connection applies the half-year convention.     The amount of depreciation expense to be taken in Year One is: $

Ron Swanson owns Swanson’s Woodcraft Connection, a store dedicated to woodworking tools, supplies, and design plans. On May 1, Year One, Swanson’s purchased a new warehouse to store additional inventory to help meet customer demand. Ron paid $50,000 for the warehouse and estimates that it will be used for twenty years. Salvage value is $5,000 and Swanson uses the straight-line method of depreciation. Swanson’s Woodcraft Connection has a December 31st year-end. What is the amount of depreciation to be taken in Year One?     The amount of depreciation to be taken in Year One is: $  Question 2     The amount of depreciation to be taken in Year Two is:$    Question 3 Now, assume that Swanson’s Woodcraft Connection applies the half-year convention.     The amount of depreciation expense to be taken in Year One is: $

FINANCIAL ACCOUNTING
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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Ron Swanson owns Swanson’s Woodcraft Connection, a store dedicated to woodworking tools, supplies, and design plans. On May 1, Year One, Swanson’s purchased a new warehouse to store additional inventory to help meet customer demand. Ron paid $50,000 for the warehouse and estimates that it will be used for twenty years. Salvage value is $5,000 and Swanson uses the straight-line method of depreciation. Swanson’s Woodcraft Connection has a December 31st year-end. What is the amount of depreciation to be taken in Year One?
 
 
The amount of depreciation to be taken in Year One is: $ 

Question 2

 
 
The amount of depreciation to be taken in Year Two is:$ 
 

Question 3

Now, assume that Swanson’s Woodcraft Connection applies the half-year convention.
 
 
The amount of depreciation expense to be taken in Year One is: $
 

Question 4

Assuming that Swanson’s Woodcraft Connection applies the half-year convention.
 
 
The amount of depreciation expense to be taken in Year Two is: $ 
 

Question 5

 
 

The adjusting entry to update depreciation in Year Three is:

Debit  ​Response area                                      Response area

                      Credit   Response area                                               Response area 

Accum. Dec.
1,125
Deprec. Expense
2,250
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Question 6

 
 

The entry to dispose of the warehouse in Year Three is:

 Debit Response area                                        Response area

Debit Response area                                         Response area

Debit Response area                                         Response area

                     Credit      Response area                                           Response area 

Cash
7,500
4,500
50,000
Loss
Accum. Deprec.
Warehouse
38,000
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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