Loose-leaf for Fundamentals of Financial Accounting with Connect
5th Edition
ISBN: 9781259619007
Author: Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter 9, Problem 9.10ME
Reporting and Recording the Disposal of a Long-Lived Asset (Straight-Line Depreciation)
As part of a major renovation at the beginning of the year. Atiase Pharmaceuticals. Inc., sold shelving units (recorded as Equipment) that were 10 years old for $800 cash. The shelves originally cost $6,400 and had been
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New lithographic equipment, acquired at a cost of $875,000 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $75,300. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year.
On March 4 of Year 5, the equipment was sold for $128,100.
Required:
1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:
a. Straight-line method
Year
DepreciationExpense
Accumulated Depreciation,End of Year
Book Value,End of Year
1
$
$
$
2
$
$
$
3
$
$
$
4
$
$
$
5
$
$
$
b. Double-declining-balance method
Year
DepreciationExpense
Accumulated Depreciation,End of Year
Book Value,End of Year
1
$
$
$
2
$
$
$
3
$
$
$
4
$
$
$
5
$
$
$
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New lithographic equipment, acquired at a cost of $656,250 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $56,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year.
On March 4 of Year 5, the equipment was sold for $96,100.
Required:
1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:
a. Straight-line method
Year
DepreciationExpense
Accumulated Depreciation,End of Year
Book Value,End of Year
1
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$fill in the blank f3adbb01f07801f_2
$fill in the blank f3adbb01f07801f_3
2
$fill in the blank f3adbb01f07801f_4
$fill in the blank f3adbb01f07801f_5
$fill in the blank f3adbb01f07801f_6
3
$fill in the blank…
New lithographic equipment, acquired at a cost of $800,000 on March 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $90,000. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year.
In the first week of the fifth year, on March 4, the equipment was sold for $135,000.
Required:
1.
Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method.
2.
Journalize the entry to record the sale assuming the manager chose the double-declining-balance method. Refer to the Chart of Accounts for exact wording of account titles.
3.
Journalize the entry to record the sale in (2), assuming that the equipment was sold for $88,750 instead of…
Chapter 9 Solutions
Loose-leaf for Fundamentals of Financial Accounting with Connect
Ch. 9 - Define long-lived assets. What are the two common...Ch. 9 - Under the cost principle, what amounts should be...Ch. 9 - What is the term for recording costs as assets...Ch. 9 - 4. Waste Management, Inc., regularly incurs costs...Ch. 9 - Distinguish between ordinary repairs and...Ch. 9 - Describe the relationship between the expense...Ch. 9 - Why are different depreciation methods allowed?Ch. 9 - In computing depreciation, three values must be...Ch. 9 - Prob. 9QCh. 9 - After merging with Northwest Airlines, Delta...
Ch. 9 - A local politician claimed, to reduce the...Ch. 9 - What is an asset impairment? How is it accounted...Ch. 9 - What is book value? When equipment is sold for...Ch. 9 - Prob. 14QCh. 9 - Prob. 15QCh. 9 - FedEx Corporation reports the cost of its aircraft...Ch. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - (Supplement 9A) How does depletion affect the...Ch. 9 - (Supplement 9B) Over what period should an...Ch. 9 - Prob. 1MCCh. 9 - Prob. 2MCCh. 9 - Prob. 3MCCh. 9 - A company wishes to report the highest earnings...Ch. 9 - Barber, Inc., depreciates its building on a...Ch. 9 - Thornton Industries purchased a machine on July 1...Ch. 9 - ACME. Inc., uses straight-line depreciation for...Ch. 9 - What assets should be amortized using the...Ch. 9 - Prob. 9MCCh. 9 - The Simon Company and the Allen Company each...Ch. 9 - Classifying Long-Lived Assets and Related Cost...Ch. 9 - Prob. 9.2MECh. 9 - Prob. 9.3MECh. 9 - Computing Book Value (Straight-Line Depreciation)...Ch. 9 - Computing Book Value (Units-of-Production...Ch. 9 - Computing Book Value (Double-Declining-Balance...Ch. 9 - Calculating Partial-Year Depreciation Calculate...Ch. 9 - Prob. 9.8MECh. 9 - Recording the Disposal of a Long-Lived Asset...Ch. 9 - Reporting and Recording the Disposal of a...Ch. 9 - Prob. 9.11MECh. 9 - Prob. 9.12MECh. 9 - Computing and Evaluating the Fixed Asset Turnover...Ch. 9 - (Supplement 9A) Recording Depletion for a Natural...Ch. 9 - Prob. 9.15MECh. 9 - Prob. 9.1ECh. 9 - Prob. 9.2ECh. 9 - Determining Financial Statement Effects of an...Ch. 9 - Prob. 9.4ECh. 9 - Prob. 9.5ECh. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Prob. 9.8ECh. 9 - Demonstrating the Effect of Book Value on...Ch. 9 - Prob. 9.10ECh. 9 - Prob. 9.11ECh. 9 - Prob. 9.12ECh. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Computing Depreciation and Book Value for Two...Ch. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Prob. 9.2CPCh. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Prob. 9.3PACh. 9 - Prob. 9.4PACh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Prob. 9.4PBCh. 9 - Accounting for Operating Activities (Including...Ch. 9 - Prob. 9.1SDCCh. 9 - Prob. 9.2SDCCh. 9 - Ethical Decision Making: A Mini-Case Assume you...Ch. 9 - Critical Thinking: Analyzing the Effects of...Ch. 9 - Prob. 9.7SDCCh. 9 - Accounting for the Use and Disposal of Long-Lived...
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- ! Required information [The following information applies to the questions displayed below.] Cash As part of a major renovation at the beginning of the year, Atiase Pharmaceuticals, Incorporated, sold shelving units (recorded as Equipment) that were 10 years old for $800 cash. The shelves originally cost $6,400 and had been depreciated on a straight-line basis over an estimated useful life of 10 years with an estimated residual value of $400. Required: 1. Complete the table below, indicating the account, amount, and direction of the effect on disposal. Assume that depreciation has been recorded to the date of sale. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign. Do not round intermediate calculations.) Assets 800 Liabilities Stockholders' Equityarrow_forwardWhat is the solution and/or answer to this problem? Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $718,750 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $61,800. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $105,300. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Year DepreciationExpense Accumulated Depreciation,End of Year Book Value,End of Year 1 $fill in the blank ae7e56f7b05f016_1 $fill in the blank ae7e56f7b05f016_2 $fill in the blank ae7e56f7b05f016_3 2 $fill in the blank…arrow_forwardHelp Save & Exit Submit A company used straight-line depreciation for an item of equipment that cost $21,000, had a salvage value of $6,000 and a six-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $2,100 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life: y S22+ Multiple Choice $8,300. $3,800. $1,500. 0 $6,000.arrow_forward
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