Wildhorse Company purchased equipment on January 2, 2021, for $118,600. The equipment had an estimated useful life of 5 years with an estimated salvage value of $10,800. Wildhorse uses straight-line depreciation on all assets. On January 2, 2025, Wildhorse exchanged this equipment plus $12,300 in cash for newer equipment. The old equipment has a fair value of $54,800. Prepare the journal entry to record the exchange on the books of Wildhorse Company. Assume that the exchange has commercial substance. (If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 2 eTextbook and Media List of Accounts Debit Credit

Wildhorse Company purchased equipment on January 2, 2021, for $118,600. The equipment had an estimated useful life of 5 years with an estimated salvage value of $10,800. Wildhorse uses straight-line depreciation on all assets. On January 2, 2025, Wildhorse exchanged this equipment plus $12,300 in cash for newer equipment. The old equipment has a fair value of $54,800. Prepare the journal entry to record the exchange on the books of Wildhorse Company. Assume that the exchange has commercial substance. (If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 2 eTextbook and Media List of Accounts Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 11E: On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated...

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Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
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On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
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Gant Co. purchased a machine on July 1, 2022, for $400,000. The machine has an estimated useful life of five years and a salvage value of $80,000. The machine is being depreciated from the date of acquisition using the double declining-balance method. For the year ended December 31, 2023, Gant should record depreciation expense on this machine of:
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The Harry Corporation purchased a machine on January 1, 2020. The machine cost 46,000, with an estimated salvage value of P 2,000 and an estimated useful life of 10 years. As a result of technological improvements, a revision of the machine's useful life and estimated salvage value was made. On January 1, 2021, the equipment was estimated to last through 2022, with an estimated value at the end of 2022 of P 500. Harry uses the straight-line depreciation method. What is the revised depreciation in year 2021?
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