Disclosure of Property, Plant, and Equipment. Use the information in E11-13, part (a) to prepare the required footnote disclosure for Kurtis Koal Company, Inc.’s property, plant, and equipment for Years 1 and 2, including a statement of its accounting policy and a table with account balances. E11-13. Depreciation Methods. Disposal. Kurtis Koal Company, Inc. purchased a new mining machine at a total cost of $900,000 on the first day of its fiscal year. The firm estimates that the machine has a useful life of 6 years or 6,000,000 tons of coal and a residual value of $60,000 at the end of its useful life. The following schedule indicates the actual number of tons of coal mined with the machine per year: Year Tons of Coal 1 700,000 2 1,400,000 3 1,600,000 4 1,000,000 5 750,000 6 550,000 Required Prepare the depreciation schedules for the machine assuming that Kurtis Koal used the following methods (each case is independent): a. Straight-line method.
Disclosure of Property, Plant, and Equipment. Use the information in E11-13, part (a) to prepare the required footnote disclosure for Kurtis Koal Company, Inc.’s property, plant, and equipment for Years 1 and 2, including a statement of its accounting policy and a table with account balances. E11-13. Depreciation Methods. Disposal. Kurtis Koal Company, Inc. purchased a new mining machine at a total cost of $900,000 on the first day of its fiscal year. The firm estimates that the machine has a useful life of 6 years or 6,000,000 tons of coal and a residual value of $60,000 at the end of its useful life. The following schedule indicates the actual number of tons of coal mined with the machine per year: Year Tons of Coal 1 700,000 2 1,400,000 3 1,600,000 4 1,000,000 5 750,000 6 550,000 Required Prepare the depreciation schedules for the machine assuming that Kurtis Koal used the following methods (each case is independent): a. Straight-line method.
Solution Summary: The author explains the accounting policy, annual depreciation cost f the asset, and accumulated delinquencies should be disclosed in footnotes.
Disclosure of Property, Plant, and Equipment. Use the information in E11-13, part (a) to prepare the required footnote disclosure for Kurtis Koal Company, Inc.’s property, plant, and equipment for Years 1 and 2, including a statement of its accounting policy and a table with account balances.
E11-13. Depreciation Methods. Disposal. Kurtis Koal Company, Inc. purchased a new mining machine at a total cost of $900,000 on the first day of its fiscal year. The firm estimates that the machine has a useful life of 6 years or 6,000,000 tons of coal and a residual value of $60,000 at the end of its useful life. The following schedule indicates the actual number of tons of coal mined with the machine per year:
Year
Tons of Coal
1
700,000
2
1,400,000
3
1,600,000
4
1,000,000
5
750,000
6
550,000
Required
Prepare the depreciation schedules for the machine assuming that Kurtis Koal used the following methods (each case is independent):
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