FUNDAMENTAL ACCOUNTING PRINCIPLES
24th Edition
ISBN: 9781264044375
Author: Wild
Publisher: McGraw-Hil
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Chapter 10, Problem 10SP
To determine
Concept Introduction:
This is one of the methods to calculate the depreciation on assets. Under this method the
Requirement-1:
To Calculate:
The amount of depreciation expenses for the year 2020
Expert Solution
Answer to Problem 10SP
The amount of depreciation expenses for the year 2020 are as follows:
| Depreciation Expense- Office Equipment for the year 2020 | $ 400 |
| Depreciation Expense- Computer Equipment for the year 2020 | $ 1,250 |
Explanation of Solution
The amount of depreciation expenses for the year 2020 are calculated as follows:
| $ 400 | |
| Accumulated Depreciation- Office Equipment as on Dec. 31, 2020 (B) | $ 800 |
| Depreciation Expense- Office Equipment for the year 2020 (B-A) | $ 400 |
| Accumulated Depreciation- Computer Equipment as on Dec. 31, 2019 (A) | $ 1,250 |
| Accumulated Depreciation- Computer Equipment as on Dec. 31, 2020 (B) | $ 2,500 |
| Depreciation Expense- Computer Equipment for the year 2020 (B-A) | $ 1,250 |
To determine
Concept Introduction:
Straight line method of depreciation:
This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset it divided equally for each year f its estimated life. The formula to calculate the deprecation under straight line method is as follows:
Requirement-2:
To Calculate:
The book value of the assets as on Dec. 31, 2020
Expert Solution
Answer to Problem 10SP
The book value of the assets as on Dec. 31, 2020 is as follows:
| Book value of Office Equipment as on Dec. 31, 2020 | $ 7,200 |
| Book value of Computer Equipment as on Dec. 31, 2020 | $ 17,500 |
Explanation of Solution
The book value of the assets as on Dec. 31, 2020 is calculated as follows:
| Office Equipment (A) | $ 8,000 |
| Accumulated Depreciation- Office Equipment as on Dec. 31, 2020 (B) | $ 800 |
| Book value of Office Equipment as on Dec. 31, 2020 (B-A) | $ 7,200 |
| Computer Equipment (A) | $ 20,000 |
| Accumulated Depreciation- Computer Equipment as on Dec. 31, 2020 (B) | $ 2,500 |
| Book value of Computer Equipment as on Dec. 31, 2020 (B-A) | $ 17,500 |
To determine
Concept Introduction:
Straight line method of depreciation:
This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset it divided equally for each year f its estimated life. The formula to calculate the deprecation under straight line method is as follows:
Asset Turnover Ratio:
Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:
Requirement-3:
To Calculate:
The Asset turnover ratio for the period of three months
Expert Solution
Answer to Problem 10SP
The Asset turnover ratio for the period of three months shall be 0.43 which below the industry average.
Explanation of Solution
The Asset turnover ratio for the period of three months is calculated as follows:
| Net Sales (A) | $ 44,000 |
| Beginning Total Assets (B) | $ 83,460 |
| Ending Total Assets (C) | $ 120,265 |
| Average Total Assets (D) = (A+B)/2 = | $ 101,863 |
| Total Asset Turnover (A/B) | 0.43 |
Total Asset Turnover for three months period is 0.43, hence one year Total Asset Turnover shall be 0.43*12/3 = 1.72
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Chapter 10 Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQ
Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Cost of plant assets C1 Kegler Bowling installs...Ch. 10 - Assigning costs to plant assets C1 Q Listed below...Ch. 10 - Straight-line depreciation P1 On January 1= the...Ch. 10 - QS 10-' Units-of-production depreciation
On...Ch. 10 - QS10-5 Double-declining-balance method P1
A...Ch. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Revenue and capital expenditures C3 1. Classify...Ch. 10 - Prob. 10QSCh. 10 - Natural resources and depletion P3 Perez Company...Ch. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Exercise 10-1 Cost of plant assets C1 Q Rizio Co....Ch. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Exercise 104 Straight-line depreciation P1 Ramirez...Ch. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6
Double-declining-balance...Ch. 10 - Exercise 10-7 Straight-line depreciation P1
New...Ch. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Exercise 10-9 Straight-line depreciation and...Ch. 10 - Exercise 10-10
Double-declining-balance...Ch. 10 - Exercise 10-11 Straight-line, partial-year...Ch. 10 - Exercise 10-12 Dauble-declining-balance....Ch. 10 - Exercise 10-13
Revising depreciation
C2
Apex...Ch. 10 - Exercise 10-14 Ordinary repairs, extraordinary...Ch. 10 - Exercise 10.15 Extraordinary repairs; plant asset...Ch. 10 - Exercise 10-16 Disposal of assets P2 Diaz Company...Ch. 10 - Exercise 10-17 Partial-year depreciation: disposal...Ch. 10 - Exercise 10-18 Depletion of natural resources P3...Ch. 10 - Exercise 10-19 Amortization of intangible assets...Ch. 10 - Exercise 10-20 Goodwill P4 Robinson Company...Ch. 10 - Exercise 10-21 Preparing a balance sheet P1 P3...Ch. 10 - Exercise 10-22 Evaluating efficient use of assets...Ch. 10 - Exercise 10-23A Exchanging assets P5
Gilly...Ch. 10 - Prob. 24ECh. 10 - Problem 10-1A Plant asset costs; depreciation...Ch. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Problem 10-3A Asset cost allocation; straight-line...Ch. 10 - Problem 10-4A
Computing and revising depreciation;...Ch. 10 - Problem 10-5A Computing and revising depreciation;...Ch. 10 - Problem 1O-6A
Disposal of plant assets
C1 P1...Ch. 10 - Problem 1O7A
Natural resources
P3
On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Problem 10-1B Plant asset costs; depreciation...Ch. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Problem 10-3B Asset cost allocation; straight-line...Ch. 10 - Prob. 4BPSBCh. 10 - Problem 10-5B Computing and revising...Ch. 10 - Problem 1O-6B
Disposal of plant assets
C1 P1 P2
On...Ch. 10 - Prob. 7BPSBCh. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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