Fundamental Accounting Principles
24th Edition
ISBN: 9781260158595
Author: Wild
Publisher: MCG
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Chapter 10, Problem 3APSA
To determine
Concept Introduction:
Straight line
Double declining method of depreciation is a method of depreciation in which rate is doubled according to the useful life of an asset.
Requirement 1:
We have to determine the total of all asset mentioned.
Expert Solution
Answer to Problem 3APSA
| Particulars | Land | Building 2 | Building 3 | Land improvements 1 | Land improvements 2 |
| Totals | $2,115,800 | 598,000 | 2202,000 | 390,000 | 164,000 |
.
Explanation of Solution
| Allocation of purchase price | Appraised value | Percent of Total appraised value | x | Total cost of acquisition | = | Apportioned cost |
| Land | 1,736,000 | 62% | 2,600,000 | 1612,000 | ||
| Building2 | 644,000 | 23% | 2,600,000 | 598,000 | ||
| Land improvement 1 | 420,000 | 15% | 2,600,000 | 390,000 | ||
| Total | 28,00,000 | 100% | $2,600,000 | |||
| Particulars | Land | Building 2 | Building 3 | Land improvements 1 | Land improvements 2 |
| Purchase price | 1,612,000 | 598,000 | 0 | 390,000 | 0 |
| Demolition | 328,400 | ||||
| Land grading | 175,400 | ||||
| New building (construction) | 0 | 0 | 2202,000 | 0 | 0 |
| New improvement cost | 164,000 | ||||
| Totals | $2,115,800 | 598,000 | 2202,000 | 390,000 | 164,000 |
In the above table, the appraised value of total assets is 2,800,000. We have calculated the percentage of total assets in proportion to appraised value. Thereafter, the value $2,600,000 has been apportioned in the ratio of appraised value of individual assets. After calculating individual value, the additional costs have been added to the apportioned acquisition value of respective individual asset and total value of asset has been derived.
To determine
Concept Introduction:
Journal entry is recording of all accounting transaction in a chronological order.
Straight line depreciation is a method of depreciation in which asset is depreciated over its useful life constantly. In this method depreciated is calculated by dividing cost of asset less salvage value by useful life of an asset.
Double declining method of depreciation is a method of depreciation in which rate is doubled according to the useful life of an asset.
Requirement 2:
We have to determine the journal entry for cash transaction.
Expert Solution
Answer to Problem 3APSA
| Transaction | Particulars | Amount ($) | Amount($) |
| 1. | Land | 2,115,000 | |
| Building 2 | 598,000 | ||
| Building 3 | 2,202,000 | ||
| Land improvements 1 | 390,000 | ||
| Land improvements 2 | 164,000 | ||
| Cash | 5469,800 | ||
| ( to record cash transaction) |
.
Explanation of Solution
The above answer can be explained as all asset will be debited and cash account will be credited.
In this case land account, Building 2 &3 and Land improvements 1 & 2 will be debited with their respective amount and cash account will be credited with lumpsum amount.
To determine
Concept Introduction:
Journal entry is recording of all accounting transaction in a chronological order.
Straight line depreciation is a method of depreciation in which asset is depreciated over its useful life constantly. In this method depreciated is calculated by dividing cost of asset less salvage value by useful life of an asset.
Double declining method of depreciation is a method of depreciation in which rate is doubled according to the useful life of an asset.
Requirement 3:
We have to determine the journal entry for depreciation asset.
Expert Solution
Answer to Problem 3APSA
| Transaction | Particulars | Amount ($) | Amount($) |
| 1. | Depreciation expense- building 2 | 26,900 | |
| 26,900 | |||
| ( to record depreciation) | |||
| Depreciation expense- building 3 | 72,400 | ||
| Accumulated depreciation − building 3 | 72,400 | ||
| ( to record depreciation) | |||
| Depreciation expense- land improvement 1 | 32,500 | ||
| Accumulated depreciation − land improvement 1 | 32,500 | ||
| ( to record depreciation) | |||
| Depreciation expense- land improvement 2 | 8200 | ||
| Accumulated depreciation − land improvement 2 | 8200 | ||
| ( to record depreciation) |
Explanation of Solution
The above answer can be explained as depreciation will be calculated on asset and depreciation expense on asset will be debited and accumulated depreciation account will be credited.
Depreciation on assets can be calculated as −
| Particulars | Formula | Amount |
| Depreciation expense- building 2 | (598,000-60,000)/20 | 26,900 |
| Depreciation expense- building 3 | (2,202,000-392000)/25 | 72,400 |
| Depreciation expense- land improvement 1 | 390,000/12 | 32,500 |
| Depreciation expense- land improvement 2 | 164,000/20 | 8,200 |
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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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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY