Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Chapter 9, Problem 5R
A truck was recently purchased for $75,000 with a salvage value of $5,000 and an estimated useful life of eight years or 150,000 miles (24,000 miles per year for the first five years and 10,000 miles per year after that). Enter the new information in the Data Section of the worksheet. Again, make sure the totals for all three methods are in agreement. Print the worksheet. Save this new data as DEPREC5.
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Chapter 9 Solutions
Excel Applications for Accounting Principles
Ch. 9 - Dunedin Drilling Company recently acquired a new...Ch. 9 - Open the file DEPREC from the website for this...Ch. 9 - In the space below, prepare the journal entry to...Ch. 9 - To test your formulas, assume the machine...Ch. 9 - A truck was recently purchased for 75,000 with a...Ch. 9 - Dunedin Drilling Company recently acquired a new...
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- Consider the following accounting information for a computer system:Cost basis of the asset (I) = $10,000;Useful life (N) = 5 years;Estimated salvage value (S) = $2,000. Compute the annual depreciation allowances and the resulting book values using the double-declining-balance depreciation method.arrow_forwardTo test your formulas, assume the machine purchased had an estimated useful life of three years (20,000, 30,000, and 50,000 hours, respectively). Enter the new information in the Data Section of the worksheet. Does your depreciation total 320,000 under all three methods? There are three common errors made by students completing this worksheet. Lets clear up two of them. One, an asset that has a three-year life should have no depreciation claimed in Year 4. This can be corrected using an =IF statement in Year 4. For example, the correct formula in cell C32 is =IF(B32D9,0,(D7D8)/D9) or =IF(B32D9, 0, SLN(D7, D8, D9)). You may wish to edit what you have already entered rather than retype it. Two, as mentioned in requirement 2, the double-declining-balance calculation needs to be modified in the last year of the assets life. Assuming you have already modified the formula for Year 4 (per instructions in step 2), alter the formula for Year 3 also. If you corrected any formulas, test their correctness by trying different estimated useful lives (between 3 and 8) in cell E9. Then reset the Data Section to the original values, save the revised file as DEPREC2, and reprint the worksheet to show the correct formulas. The third common error doesnt need to be corrected in this problem. The general form of the double-declining-balance formula needs to be modified to check the net book value of the asset each year to make sure it does not go below salvage value. =DDB does this automatically, but if you are writing your own formulas, this gets very complicated and is beyond the scope of the problem.arrow_forwardDunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.arrow_forward
- Subject - account Please help me. Thankyou.arrow_forwardConsider the following accounting information for a computer system: Cost basis of the asset, I = $10,000, Useful life, N = 5 years, Estimated salvage value, S = $0. Use the double-declining-depreciation method to compute the annual depreciation allowances and the resulting book values.arrow_forwardYour company has decided to purchase a special tool with a first cost of $8,500, a salvage value of $1,400, and a useful life of five (5) years. Develop a depreciation schedule using straight line, double declining balance, and sum of years’ digits. What is the value of cell #14?arrow_forward
- You have just bought a new pusher dozer for your equipment fleet. Its cost is $100,000. It has salvage value of $12,000 at the end of its service life. a) Calculate the depreciation using the straight-line method. Show the table with the book value and the depreciation for each year. b) Calculate the depreciation using the DDB method. Show the table with the book value and the depreciation for each year. c) The new pusher dozers $35,000/year for your company during its service life. Determine the tax amount owed at the end of each year if your marginal tax rate is 25% for the income made using this new equipment. Perform this tax calculation separately, once using straight-line depreciation and then using DDB depreciation. d) Based on your calculations for part (c), which depreciation method would you use to file the taxes.arrow_forwardTyped answer please. I need correct answer and I will rate accordingly.arrow_forwardPlease show all your workarrow_forward
- A piece of equipment is purchased for $110,000 and has an estimated salvage value of $10,000 at the end of the recovery period. Prepare a depreciation schedule for the piece of equipment using the sum-of-the-years method with a recovery period of seven years. Please answer in excel with each cells formula.arrow_forwardIf the total depreciation after 1 year and 2 years in an equipment are 21,255 and 35,731 respectively using DBM and the equipment has an expected life of 8 years, find the salvage value. Write your final answer in two decimal places.arrow_forwardGiven an asset which has an initial cost of $100,000, Useful life of 4 years and a salvage value of 10,000. Use the DDB method to determine the depreciation allowances and the book values for year 1 through 4. You need to see whether switching to the SL method, at any year, is a wise decision.arrow_forward
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