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(a)
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Units-of-Activity Method: Under the units-of-activity method, the depreciation expense amount is calculated based on the units produced by the asset during the period.
Declining-Balance Method: Under the declining balance method, the depreciation is charged at the same rate every year but on the declined balance or the book value of the asset in the beginning of the year.
Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.
Accounting rules for journal entries:
- To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
Main components of balance sheet are assets, liabilities and
To determine: Depreciation expense for 2017 and 2018 under Straight-line method
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Depreciation expense for 2017 and 2018 under Units-of-activity method
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Depreciation expense for 2017 and 2018 under Declining-Balance Method
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To prepare: On the basis of straight-line method,
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To prepare: On the basis of straight-line method, the presentation of truck in the balance sheet on December 31, 2017.
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Chapter 10 Solutions
ACCOUNTING PRINCIPLES V.1 W/ WILEY PLU
- Joe transferred land worth $200,000, with a tax basis of $40,000, to JH Corporation, an existing entity, for 100 shares of its stock. JH Corporation has two other shareholders, Ethan and Young, each of whom holds 100 shares. With respect to the transfer:a. Joe has no recognized gain. b. JH Corporation has a basis of $160,000 in the land.c. Joe has a basis of $200,000 in his 100 shares in JH Corporation. d. Joe has a basis of $40,000 in his 100 shares in JH Corporation. e. None of the above.arrow_forwardI need help with this general accounting problem using proper accounting guidelines.arrow_forwardI am looking for the correct answer to this general accounting problem using valid accounting standards.arrow_forward
- accounting question?arrow_forwardThree individuals form JEY Corporation with the following contributions: Joe, cash of $50,000 for 50 shares; Ethan, land worth $20,000 (basis of $11,000) for 20 shares; and Young, cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares. a. These transfers are fully taxable and not subject to § 351. b. Young’s basis in her stock is $27,000. c. Young’s basis in her stock is $6,000. d. Ethan’s basis in his stock is $20,000. e. None of the above.arrow_forwardNonearrow_forward
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