Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations: Disposal with no gain no loss : When the asset is disposed with no consideration received. Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation ). Disposal with loss: When the asset is disposed for less than its book value. Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below: Depreciation = ( Cost of the asset − Residual value ) Estimated useful life of the asset To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

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Answer 1

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

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Selected comparative financial statements of Korbin Company follow. Sales KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 $ 512,008 $ 392,240 2019 $ 272,200 Cost of goods sold 308,229 245,542 174,208 Gross profit 203,779 146,698 97,992 Selling expenses 72,705 54,129 35,930 Administrative expenses 46,081 34,517 22,593 Total expenses 118,786 88,646 58,523 Income before taxes .84,993 58,052 39,469 Income tax expense 15,809 11,901 8,012 Net income $ 69,184 $ 46,151 $ 31,457 KORBIN COMPANY Comparative Balance Sheets Assets Current assets Long-term investments Plant assets, net Total assets Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings December 31 2021 2020 2019 $ 54,370 0 $ 36,390 600 $ 48,645 3,870 99,436 90,776 53,339 Total liabilities and equity $ 153,806 $ 127,766 $ 105,854 $ 22,456 $ 19,037 $ 18,524 68,000 68,000 50,000 8,500 8,500 5,556 54,850 32,229 31,774 $ 153,806 $ 127,766 $ 105,854

Answer 2

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

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Answer 3

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

B.

To determine

the book value of the equipment on January 1of Year 4.

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 6

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

Answer 7

Chapter 9, Problem 9.18EX

A.

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

To determine: the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

Answer 8

B.

To determine

the book value of the equipment on January 1of Year 4.

Answer 9

B.

To determine

the book value of the equipment on January 1of Year 4.

Answer 10

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 11

C.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 12

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 13

D.

To determine

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 9 - ONeil Office Supplies has a fleet of automobiles...Ch. 9 - Prob. 2DQ Ch. 9 - Prob. 3DQ Ch. 9 - Distinguish between the accounting for capital...Ch. 9 - Immediately after a used truck is acquired, a new...Ch. 9 - Keyser Company purchased a machine that has a...Ch. 9 - Is it necessary for a business to use the same...Ch. 9 - A. Under what conditions is the use of an...Ch. 9 - For some of the fixed assets of a business, the...Ch. 9 - A. Over what period of time should the cost of a...

Solution Summary: The author explains the straight-line method of depreciation, wherein the same amount is allocated every year over the estimated useful life of an asset.

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the book value of the equipment on January 1of Year 4.

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

To record: the journal entry for the sale of the equipment on January 3 of Year 4.

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Chapter 9 Solutions