ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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At the beginning of 2018, Bridgeport Company acquired equipment costing $187,400. It was estimated that this equipment would
have a useful life of 6 years and a salvage value of $18,740 at that time. The straight-line method of depreciation was considered the
most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year.
During 2020 (the third year of the equipment's life), the company's engineers reconsidered their expectations, and estimated that
the equipment's useful life would probably be 7 years (in total) instead of 6 years. The estimated salvage value was not changed at
that time. However, during 2023 the estimated salvage value was reduced to $5,000.
Indicate how much depreciation expense should be recorded each year for this equipment, by completing the following table.
Depreciation
Expense
Accumulated
Depreciation
Year
2018
24
%24
2019
2020
2021
2022
2023
2024
At the beginning of 2020, Riverbed Company acquired equipment costing $156,400. It was estimated that this equipment would have a useful life of 6 years and a salvage value of $15,640 at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year.During 2022 (the third year of the equipment’s life), the company’s engineers reconsidered their expectations, and estimated that the equipment’s useful life would probably be 7 years (in total) instead of 6 years. The estimated salvage value was not changed at that time. However, during 2025 the estimated salvage value was reduced to $5,000.Indicate how much depreciation expense should be recorded each year for this equipment, by completing the following table.
Year
DepreciationExpense
AccumulatedDepreciation
2020
$enter a dollar amount
$enter a dollar amount
2021
enter a dollar amount
enter a…
Novak Company purchased a piece of equipment at the beginning of 2022. The equipment cost $402,120. It has an estimated service
life of 8 years and an expected salvage value of $74,160. The sum-of-the-years-digits method of depreciation is being used. Someone
has already correctly prepared a depreciation schedule for this asset. This schedule shows that $36,440 will be depreciated for a
particular calendar year.
Determine for what particular year the depreciation amount for this asset will be $36,440.
Year of depreciation
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Similar questions
- During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.arrow_forwardOn 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.arrow_forwardHathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?arrow_forward
- A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.arrow_forwardKam 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.arrow_forwardJudds Company purchased a new plant asset on April 1, 2020, at a cost of $711,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Judds’ accounting period is the calendar year. Instructions a. Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years’-digits method. b. Compute the depreciation for this asset for 2020 and 2021 using the double-declining-balance method.arrow_forward
- Equipment was acquired on January 1, 2019 at a cost of $170,000. The equipment was originally estimated to have a salvage value of $24,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2021 using the straight-line method. On January 1, 2022, the estimated salvage value was revised to $35,000 and the useful life was revised to a total of 8 years. Prepare the journal entry to record depreciation expense for 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Depreciation expense for 2022 Adjusting journal entry at 12/31/22: $ Date Account Titles and Explanation Dec. 31 Debit Creditarrow_forwardA Company purchased equipment on January 1, 2019 for AED 70,000. It is estimated that the equipment will have a AED 5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life. Required: Solve the following independent questions where you need to show all the required calculations: Part A Compute the amount of depreciation expense for the year ended December 31, 2020, using the straight-line method of depreciation. Part B:- If 16,000 units of product are produced in 2019 and 24,000 units are produced in 2020, what is the book value of the equipment at December 31, 2020? The company uses the units-of-activity depreciation method. I Part C If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation-Equipment account at December 31, 2020?arrow_forwardDogarrow_forward
- devratarrow_forwardJudds Company purchased a new plant asset on April 1, 2020, at a cost of $711,000. It was estimated to have a useful life of 20 years and a salvage value of $60,000. Judd's accounting period is the calendar year. required A. Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years’-digits method. B. Compute the depreciation for this asset for 2020 and 2021 using the double-declining-balance method.arrow_forwardPlease help find depreciation for 2021 to the closest dollar.arrow_forward
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