Wesley Co. purchased an equipment on April 1, 2013. It has an expected life of 20 years andno residual value. The company's financial year ended on December 31. The followingexpenditures were associated with the purchase:Cost of equipmentFreight chargesSales taxes$120,0005,2007,80027,000Installation of equipmentRequired:(SHOW WORKINGS)Compute the depreciation expense for Years 2013 and 2014, using(i)the straight-line method with fractional years rounded to the nearest whole month;(ii)the 150% declining balance and using the half-vear convention.

As per straight line method depreciation is charged by equal amount over the useful life of the…

Answered: Wesley Co. purchased an equipment on…

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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Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of$12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST.Required:a) Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June.Calculate the depreciation expense for the year 2019–20 using each of the following depreciationmethods (6 marks) straight-line diminishing balance (depreciation rate has been calculated as 31%) units of production (assume the van was driven 78,000 kilometres during the financial year)b) Record the adjusting entries for the depreciation at 30 June 2021 using diminishing balancemethod. c) Show how the van would appear in the balance sheet prepared at the end of year 2 using Straightline method.
Navigation Inc. acquired an equipment on January 1, 2014 at a cost of $2,200,000 including an estimated residual value of $200,000 and twenty (20) years estimated useful life. The replacement cost of the equipment is $2,400,000 on December 30, 2017. The depreciated replacement cost declined to $1,470,000 after two years. If there is a need to gross up, round off percentage to whole number and to nearest dollar. Questions: 1. What is the carrying amount of the equipment on December 31, 2020?2. What is the balance of the revaluation surplus immediately after revaluation?
Irwin, Inc., constructed a machine at a total cost of $35 million. Construction was completed at the end of 2014and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At thebeginning of 2018, Irwin decided to change to the straight-line method. Ignoring income taxes, what journalentry(s) should Irwin record relating to the machine for 2018?
Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of $12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST. Required: a) Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2019–20 using each of the following depreciation methods  straight-line  diminishing balance (depreciation rate has been calculated as 31%)  units of production (assume the van was driven 78,000 kilometres during the financial year) b) Record the adjusting entries for the depreciation at 30 June 2021 using diminishing balance method. c) Show how the van would appear in the balance sheet prepared at the end of year 2 using Straight-line method. June 1 4 Purchases 9 Sales 12 Purchases 21 Sales 26 Purchases Inventory all purchases and sales are on credit.
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On January 2, 2015, Wang Company acquired equipment to be used in its manufacturing operations. The equipment has an estimated useful life of 10 years and an estimated salvage value of $45,000. The depreciation applicable to this equipment was $210,000 for 2018, computed under the sum-of-the-years'-digits method. What was the acquisition cost of the equipment? A. $1,605,000 B. $1,695,000 C. $1,650,000 D. $1,625,000
On December 31,2015, DAVE Corporation purchased an equipment with an estimated useful life of 10 years. The equipment was expected to have a residual value of $10,000 at the end of its service life. The sum-of -the-years-digits method was used in computing depreciation. For the year ended December 31,2020, DAVE recorded depreciation expense of $36,000. What was the acquisition cost of the equipment?

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