Using the same purchase information at the beginning of the question, prepare the table assuming that the ompany used double-declining-balance depreciation. Year 2017 2018 2019 2020 Year 2017 2018 2019 Net Book Value at the Beginning of the Year $70000 $35000 $17500 2020 11000 Cost of Long-Term Asset $70,000 1) Using the same purchase information and residual value at the beginning of the question, assume that the ompany uses the units-of-production method. The asset can produce one million units. Prepare the depreciation able. $70,000 $70,000 $70,000 Depreciation Expense $35000 $17500 $6500 $0 Units Produced 210,000 $12390 140,000 $ 120,000 $ 360,000 $ Accumulated Depreciation $ 35000 $52500 $59000 Depreciation Expense 59000 $12390 $ LA LA $ LA Net Book Value at the End of the Year $ Accumulated Depreciation $ 35000 $17500 $11000 11000 Net Book Value $ LA $ 57610

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Chapter1: Financial Statements And Business Decisions
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Could you explain me how to do the option d. Thanks.

 

 

 

Equipment was purchased on January 1, 2017 for $70,000. The asset is expected to last for four years, at which
time the estimated residual value will be $11,000.
Required
a) Prepare a table showing the amount of depreciation expense each year, accumulated depreciation to date and
net book value. The company uses straight-line depreciation.
Do not enter dollar signs or commas in the input boxes.
Round all dollar figure answers to the nearest whole number.
Year Cost of Long-Term Asset Depreciation Expense Accumulated Depreciation Net Book Value
2017
$70,000 $14750
14750
$55250
2018
40500
25750
11000
2019
2020
Jan 1
$70,000 $14750
$70,000 $14750
$70,000 $14750
b) The asset was sold for $15,000 on the first day of 2021. Prepare the journal entry to record the sale.
Enter all debit accounts in alphabetical order.
Enter all credit accounts in alphabetical order.
Date
Account Title and Explanation
Accumulated Depreciation
Cash
Equipment
Gain on Disposal of Asset
To record sale of equipment for cash
O
4
29500
44250
59000
Debit
59000
15000
Credit
70000
4000
Transcribed Image Text:Equipment was purchased on January 1, 2017 for $70,000. The asset is expected to last for four years, at which time the estimated residual value will be $11,000. Required a) Prepare a table showing the amount of depreciation expense each year, accumulated depreciation to date and net book value. The company uses straight-line depreciation. Do not enter dollar signs or commas in the input boxes. Round all dollar figure answers to the nearest whole number. Year Cost of Long-Term Asset Depreciation Expense Accumulated Depreciation Net Book Value 2017 $70,000 $14750 14750 $55250 2018 40500 25750 11000 2019 2020 Jan 1 $70,000 $14750 $70,000 $14750 $70,000 $14750 b) The asset was sold for $15,000 on the first day of 2021. Prepare the journal entry to record the sale. Enter all debit accounts in alphabetical order. Enter all credit accounts in alphabetical order. Date Account Title and Explanation Accumulated Depreciation Cash Equipment Gain on Disposal of Asset To record sale of equipment for cash O 4 29500 44250 59000 Debit 59000 15000 Credit 70000 4000
c) Using the same purchase information at the beginning of the question, prepare the table assuming that the
company used double-declining-balance
depreciation.
Year
2017
2018
2019
2020
Year
2017
2018
2019
Net Book Value at the
Beginning of the Year
$70000
$35000
$17500
2020
11000
Cost of Long-Term
Asset
$70,000
$70,000
d) Using the same purchase information and residual value at the beginning of the question, assume that the
company uses the units-of-production method. The asset can produce one million units. Prepare the depreciation
table.
$70,000
$70,000
Depreciation
Expense
$ 35000
$ 17500
$ 6500
$0
Units
Produced
210,000 $12390
140,000 $
120,000 $
Depreciation
Expense
360,000 $
Accumulated
Depreciation
$ 35000
$ 52500
$59000
59000
$
$
LA
BA
$
Net Book Value at the End
of the Year
12390
Accumulated
Depreciation
$ 35000
$ 17500
$11000
11000
Net Book Value
tA
GA
TA
57610
Transcribed Image Text:c) Using the same purchase information at the beginning of the question, prepare the table assuming that the company used double-declining-balance depreciation. Year 2017 2018 2019 2020 Year 2017 2018 2019 Net Book Value at the Beginning of the Year $70000 $35000 $17500 2020 11000 Cost of Long-Term Asset $70,000 $70,000 d) Using the same purchase information and residual value at the beginning of the question, assume that the company uses the units-of-production method. The asset can produce one million units. Prepare the depreciation table. $70,000 $70,000 Depreciation Expense $ 35000 $ 17500 $ 6500 $0 Units Produced 210,000 $12390 140,000 $ 120,000 $ Depreciation Expense 360,000 $ Accumulated Depreciation $ 35000 $ 52500 $59000 59000 $ $ LA BA $ Net Book Value at the End of the Year 12390 Accumulated Depreciation $ 35000 $ 17500 $11000 11000 Net Book Value tA GA TA 57610
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