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: A n n u a l S t r a i g h t l i n e d e p r e c i a t i o n = ( C o s t − S a l v a g e V a l u e ) E s t i m a t e d l i f e i n y e a r s Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula: D o u b l e d e c l i n i n g d e p r e c i a t i o n r a t e = 2 E x p e c t e d l i f e i n y e a r s Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows: D e p r e c i a t i o n = ( C o s t - S a l v a g e V a l u e ) × U n i t s f o r t h e p e r i o d E s t i m a t e d l i f e i n u n i t s Requirement-a: To Calculate: The amount of depreciation expense for the year 2017

Question

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Answer 1

Question

Chapter 6, Problem 6.27P

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-a:

To Calculate:

The amount of depreciation expense for the year 2017

Expert Solution

Answer to Problem 6.27P

The amount of depreciation expense for the year 2017 is $90,000

Explanation of Solution

The amount of depreciation expense for the year 2017 is calculated as follows:

	Year 2017	Year 2016
Accumulated depreciation	$ 240,000	$ 150,000
Depreciation for the year 2017	$90,000
(240000-150000)

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-b:

To Calculate:

The original cost of the equipment
Depreciation method being used
Date of acquisition of the equipment

Expert Solution

Answer to Problem 6.27P

The original cost of the equipment = $420,000
Depreciation method being used = Straight line depreciation
Date of acquisition of the equipment = Apr. 2015

Explanation of Solution

Calculation of Original cost of the equipment:
	Year 2017	Year 2016
Equipment Book Value, net (A)	$ 180,000	$ 270,000
Accumulated depreciation- Equipment (B)	$ 240,000	$ 150,000
Original Cost of the equipment	$ 420,000	$ 420,000


Identification of depreciation method:
	Year 2017	Year 2016
Accumulated depreciation- Equipment	$ 240,000	$ 150,000
Depreciation for the year 2017 (240000-150000)	$90,000
Straight line depreciation = (420000-60000)/4 years =	$90,000

Calculation of date of acquisition:
Accumulated depreciation till 2017 (A)	$ 240,000
Straight line Annual depreciation (B)	$90,000
Number of year from date of acquisition till Dec. 2017 (C) = (A/B)	2.67
Number of months from date of acquisition till Dec. 2017 (C*12)	32
Date of acquisition = Dec. 2017 - 32 months =	Apr. 2015

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-c:

To Prepare:

The journal entry for sale of the equipment

Expert Solution

Answer to Problem 6.27P

The journal entry for sale of the equipment is as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment	$ 98,400
	Equipment		$ 420,000

Explanation of Solution

The journal entry for sale of the equipment is explained as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment (420000-180000-141600)	$ 98,400
	Equipment		$ 420,000
	(Being equipment sold for cash)

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Answer 2

Question

Chapter 6, Problem 6.27P

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-a:

To Calculate:

The amount of depreciation expense for the year 2017

Expert Solution

Answer to Problem 6.27P

The amount of depreciation expense for the year 2017 is $90,000

Explanation of Solution

The amount of depreciation expense for the year 2017 is calculated as follows:

	Year 2017	Year 2016
Accumulated depreciation	$ 240,000	$ 150,000
Depreciation for the year 2017	$90,000
(240000-150000)

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-b:

To Calculate:

The original cost of the equipment
Depreciation method being used
Date of acquisition of the equipment

Expert Solution

Answer to Problem 6.27P

The original cost of the equipment = $420,000
Depreciation method being used = Straight line depreciation
Date of acquisition of the equipment = Apr. 2015

Explanation of Solution

Calculation of Original cost of the equipment:
	Year 2017	Year 2016
Equipment Book Value, net (A)	$ 180,000	$ 270,000
Accumulated depreciation- Equipment (B)	$ 240,000	$ 150,000
Original Cost of the equipment	$ 420,000	$ 420,000


Identification of depreciation method:
	Year 2017	Year 2016
Accumulated depreciation- Equipment	$ 240,000	$ 150,000
Depreciation for the year 2017 (240000-150000)	$90,000
Straight line depreciation = (420000-60000)/4 years =	$90,000

Calculation of date of acquisition:
Accumulated depreciation till 2017 (A)	$ 240,000
Straight line Annual depreciation (B)	$90,000
Number of year from date of acquisition till Dec. 2017 (C) = (A/B)	2.67
Number of months from date of acquisition till Dec. 2017 (C*12)	32
Date of acquisition = Dec. 2017 - 32 months =	Apr. 2015

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-c:

To Prepare:

The journal entry for sale of the equipment

Expert Solution

Answer to Problem 6.27P

The journal entry for sale of the equipment is as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment	$ 98,400
	Equipment		$ 420,000

Explanation of Solution

The journal entry for sale of the equipment is explained as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment (420000-180000-141600)	$ 98,400
	Equipment		$ 420,000
	(Being equipment sold for cash)

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Answer 3

Question

Chapter 6, Problem 6.27P

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-a:

To Calculate:

The amount of depreciation expense for the year 2017

Expert Solution

Answer to Problem 6.27P

The amount of depreciation expense for the year 2017 is $90,000

Explanation of Solution

The amount of depreciation expense for the year 2017 is calculated as follows:

	Year 2017	Year 2016
Accumulated depreciation	$ 240,000	$ 150,000
Depreciation for the year 2017	$90,000
(240000-150000)

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-b:

To Calculate:

The original cost of the equipment
Depreciation method being used
Date of acquisition of the equipment

Expert Solution

Answer to Problem 6.27P

The original cost of the equipment = $420,000
Depreciation method being used = Straight line depreciation
Date of acquisition of the equipment = Apr. 2015

Explanation of Solution

Calculation of Original cost of the equipment:
	Year 2017	Year 2016
Equipment Book Value, net (A)	$ 180,000	$ 270,000
Accumulated depreciation- Equipment (B)	$ 240,000	$ 150,000
Original Cost of the equipment	$ 420,000	$ 420,000


Identification of depreciation method:
	Year 2017	Year 2016
Accumulated depreciation- Equipment	$ 240,000	$ 150,000
Depreciation for the year 2017 (240000-150000)	$90,000
Straight line depreciation = (420000-60000)/4 years =	$90,000

Calculation of date of acquisition:
Accumulated depreciation till 2017 (A)	$ 240,000
Straight line Annual depreciation (B)	$90,000
Number of year from date of acquisition till Dec. 2017 (C) = (A/B)	2.67
Number of months from date of acquisition till Dec. 2017 (C*12)	32
Date of acquisition = Dec. 2017 - 32 months =	Apr. 2015

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-c:

To Prepare:

The journal entry for sale of the equipment

Expert Solution

Answer to Problem 6.27P

The journal entry for sale of the equipment is as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment	$ 98,400
	Equipment		$ 420,000

Explanation of Solution

The journal entry for sale of the equipment is explained as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment (420000-180000-141600)	$ 98,400
	Equipment		$ 420,000
	(Being equipment sold for cash)

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Answer 4

Question

Chapter 6, Problem 6.27P

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-a:

To Calculate:

The amount of depreciation expense for the year 2017

Expert Solution

Answer to Problem 6.27P

The amount of depreciation expense for the year 2017 is $90,000

Explanation of Solution

The amount of depreciation expense for the year 2017 is calculated as follows:

	Year 2017	Year 2016
Accumulated depreciation	$ 240,000	$ 150,000
Depreciation for the year 2017	$90,000
(240000-150000)

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-b:

To Calculate:

The original cost of the equipment
Depreciation method being used
Date of acquisition of the equipment

Expert Solution

Answer to Problem 6.27P

The original cost of the equipment = $420,000
Depreciation method being used = Straight line depreciation
Date of acquisition of the equipment = Apr. 2015

Explanation of Solution

Calculation of Original cost of the equipment:
	Year 2017	Year 2016
Equipment Book Value, net (A)	$ 180,000	$ 270,000
Accumulated depreciation- Equipment (B)	$ 240,000	$ 150,000
Original Cost of the equipment	$ 420,000	$ 420,000


Identification of depreciation method:
	Year 2017	Year 2016
Accumulated depreciation- Equipment	$ 240,000	$ 150,000
Depreciation for the year 2017 (240000-150000)	$90,000
Straight line depreciation = (420000-60000)/4 years =	$90,000

Calculation of date of acquisition:
Accumulated depreciation till 2017 (A)	$ 240,000
Straight line Annual depreciation (B)	$90,000
Number of year from date of acquisition till Dec. 2017 (C) = (A/B)	2.67
Number of months from date of acquisition till Dec. 2017 (C*12)	32
Date of acquisition = Dec. 2017 - 32 months =	Apr. 2015

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-c:

To Prepare:

The journal entry for sale of the equipment

Expert Solution

Answer to Problem 6.27P

The journal entry for sale of the equipment is as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment	$ 98,400
	Equipment		$ 420,000

Explanation of Solution

The journal entry for sale of the equipment is explained as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment (420000-180000-141600)	$ 98,400
	Equipment		$ 420,000
	(Being equipment sold for cash)

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Answer 5

Chapter 6, Problem 6.27P

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-a:

To Calculate:

The amount of depreciation expense for the year 2017

Expert Solution

Answer to Problem 6.27P

The amount of depreciation expense for the year 2017 is $90,000

Explanation of Solution

The amount of depreciation expense for the year 2017 is calculated as follows:

	Year 2017	Year 2016
Accumulated depreciation	$ 240,000	$ 150,000
Depreciation for the year 2017	$90,000
(240000-150000)

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-b:

To Calculate:

The original cost of the equipment
Depreciation method being used
Date of acquisition of the equipment

Expert Solution

Answer to Problem 6.27P

The original cost of the equipment = $420,000
Depreciation method being used = Straight line depreciation
Date of acquisition of the equipment = Apr. 2015

Explanation of Solution

Calculation of Original cost of the equipment:
	Year 2017	Year 2016
Equipment Book Value, net (A)	$ 180,000	$ 270,000
Accumulated depreciation- Equipment (B)	$ 240,000	$ 150,000
Original Cost of the equipment	$ 420,000	$ 420,000


Identification of depreciation method:
	Year 2017	Year 2016
Accumulated depreciation- Equipment	$ 240,000	$ 150,000
Depreciation for the year 2017 (240000-150000)	$90,000
Straight line depreciation = (420000-60000)/4 years =	$90,000

Calculation of date of acquisition:
Accumulated depreciation till 2017 (A)	$ 240,000
Straight line Annual depreciation (B)	$90,000
Number of year from date of acquisition till Dec. 2017 (C) = (A/B)	2.67
Number of months from date of acquisition till Dec. 2017 (C*12)	32
Date of acquisition = Dec. 2017 - 32 months =	Apr. 2015

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-c:

To Prepare:

The journal entry for sale of the equipment

Expert Solution

Answer to Problem 6.27P

The journal entry for sale of the equipment is as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment	$ 98,400
	Equipment		$ 420,000

Explanation of Solution

The journal entry for sale of the equipment is explained as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment (420000-180000-141600)	$ 98,400
	Equipment		$ 420,000
	(Being equipment sold for cash)

Answer 6

Chapter 6, Problem 6.27P

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-a:

To Calculate:

The amount of depreciation expense for the year 2017

Expert Solution

Answer to Problem 6.27P

The amount of depreciation expense for the year 2017 is $90,000

Explanation of Solution

The amount of depreciation expense for the year 2017 is calculated as follows:

	Year 2017	Year 2016
Accumulated depreciation	$ 240,000	$ 150,000
Depreciation for the year 2017	$90,000
(240000-150000)

Answer 7

Chapter 6, Problem 6.27P

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-a:

To Calculate:

The amount of depreciation expense for the year 2017

Answer 8

Expert Solution

Answer to Problem 6.27P

The amount of depreciation expense for the year 2017 is $90,000

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The amount of depreciation expense for the year 2017 is calculated as follows:

	Year 2017	Year 2016
Accumulated depreciation	$ 240,000	$ 150,000
Depreciation for the year 2017	$90,000
(240000-150000)

Answer 13

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-b:

To Calculate:

The original cost of the equipment
Depreciation method being used
Date of acquisition of the equipment

Expert Solution

Answer to Problem 6.27P

The original cost of the equipment = $420,000
Depreciation method being used = Straight line depreciation
Date of acquisition of the equipment = Apr. 2015

Explanation of Solution

Calculation of Original cost of the equipment:
	Year 2017	Year 2016
Equipment Book Value, net (A)	$ 180,000	$ 270,000
Accumulated depreciation- Equipment (B)	$ 240,000	$ 150,000
Original Cost of the equipment	$ 420,000	$ 420,000


Identification of depreciation method:
	Year 2017	Year 2016
Accumulated depreciation- Equipment	$ 240,000	$ 150,000
Depreciation for the year 2017 (240000-150000)	$90,000
Straight line depreciation = (420000-60000)/4 years =	$90,000

Calculation of date of acquisition:
Accumulated depreciation till 2017 (A)	$ 240,000
Straight line Annual depreciation (B)	$90,000
Number of year from date of acquisition till Dec. 2017 (C) = (A/B)	2.67
Number of months from date of acquisition till Dec. 2017 (C*12)	32
Date of acquisition = Dec. 2017 - 32 months =	Apr. 2015

Answer 14

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-b:

To Calculate:

The original cost of the equipment
Depreciation method being used
Date of acquisition of the equipment

Answer 15

Expert Solution

Answer to Problem 6.27P

The original cost of the equipment = $420,000
Depreciation method being used = Straight line depreciation
Date of acquisition of the equipment = Apr. 2015

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Calculation of Original cost of the equipment:
	Year 2017	Year 2016
Equipment Book Value, net (A)	$ 180,000	$ 270,000
Accumulated depreciation- Equipment (B)	$ 240,000	$ 150,000
Original Cost of the equipment	$ 420,000	$ 420,000


Identification of depreciation method:
	Year 2017	Year 2016
Accumulated depreciation- Equipment	$ 240,000	$ 150,000
Depreciation for the year 2017 (240000-150000)	$90,000
Straight line depreciation = (420000-60000)/4 years =	$90,000

Calculation of date of acquisition:
Accumulated depreciation till 2017 (A)	$ 240,000
Straight line Annual depreciation (B)	$90,000
Number of year from date of acquisition till Dec. 2017 (C) = (A/B)	2.67
Number of months from date of acquisition till Dec. 2017 (C*12)	32
Date of acquisition = Dec. 2017 - 32 months =	Apr. 2015

Answer 20

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-c:

To Prepare:

The journal entry for sale of the equipment

Expert Solution

Answer to Problem 6.27P

The journal entry for sale of the equipment is as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment	$ 98,400
	Equipment		$ 420,000

Explanation of Solution

The journal entry for sale of the equipment is explained as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment (420000-180000-141600)	$ 98,400
	Equipment		$ 420,000
	(Being equipment sold for cash)

Answer 21

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:

Annual Straight line depreciation = (Cost− Salvage Value)Estimated life in years

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

Double declining depreciation rate = 2Expected life in years

Units of Production method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset is allocated on the basis of unit of production during its estimated life. The formula to calculate the deprecation under units of production method is as follows:

Depreciation = (Cost- Salvage Value)×Units for the periodEstimated life in units

Requirement-c:

To Prepare:

The journal entry for sale of the equipment

Answer 22

Expert Solution

Answer to Problem 6.27P

The journal entry for sale of the equipment is as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment	$ 98,400
	Equipment		$ 420,000

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

The journal entry for sale of the equipment is explained as follows:

Journal entries
Date	Account Titles	Debit	Credit

Dec. 31, 2017	Cash	$ 141,600
	Accumulated depreciation- Equipment	$ 180,000
	Loss on sale of equipment (420000-180000-141600)	$ 98,400
	Equipment		$ 420,000
	(Being equipment sold for cash)