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 Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation ) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation: Depreciation = Purchase price × ( 2 Useful life ) To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

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Answer 1

Question

Chapter 9, Problem 9.4BPR

1(A)

To determine

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

Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:

Depreciation = Purchase price × (2Useful life)

To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

(B)

To determine

the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

2.

To determine

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

3.

To determine

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

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Novelli's Nursery has developed the following data in order to calculate the lower of cost or net realizable value for its products. The individual products are listed within the categories of trees. Selling Price Cost Broad leaf trees: Ash $ 1,840 $ 1,740 Beech 2,260 1,640 Needle leaf trees: Cedar $ 2,580 $ 1,790 Fir 3,700 3,390 Fruit trees: Apple $ 1,840 $ 1,440 Cherry 2,360 1,840 The costs to sell are 10% of selling price. Required: Determine the reported inventory value assuming the lower of cost or net realizable value rule is applied to the total inventory.

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Answer 2

Question

Chapter 9, Problem 9.4BPR

1(A)

To determine

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

Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:

Depreciation = Purchase price × (2Useful life)

To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

(B)

To determine

the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

2.

To determine

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

3.

To determine

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

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Answer 3

Question

Chapter 9, Problem 9.4BPR

1(A)

To determine

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

Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:

Depreciation = Purchase price × (2Useful life)

To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

(B)

To determine

the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

2.

To determine

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

3.

To determine

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

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Answer 4

Question

Chapter 9, Problem 9.4BPR

1(A)

To determine

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

Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:

Depreciation = Purchase price × (2Useful life)

To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

(B)

To determine

the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

2.

To determine

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

3.

To determine

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

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Answer 5

Chapter 9, Problem 9.4BPR

1(A)

To determine

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

Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:

Depreciation = Purchase price × (2Useful life)

To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

(B)

To determine

the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

2.

To determine

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

3.

To determine

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

Answer 6

Chapter 9, Problem 9.4BPR

1(A)

To determine

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

Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:

Depreciation = Purchase price × (2Useful life)

To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

Answer 7

Chapter 9, Problem 9.4BPR

1(A)

To determine

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

Double-declining-balance method: It is an accelerated method of depreciation under which the depreciation declines in each successive year until the value of asset becomes zero. Under this method, the book value (original cost less accumulated depreciation) of the long-term asset is decreased by a fixed rate. It is double the rate of the straight-line depreciation. Use the following formula to determine the annual depreciation:

Depreciation = Purchase price × (2Useful life)

To determine: the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by the straight-line method.

Answer 8

(B)

To determine

the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

Answer 9

(B)

To determine

the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

Answer 10

2.

To determine

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

Answer 11

2.

To determine

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

Answer 12

3.

To determine

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

Answer 13

3.

To determine

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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Solution Summary: The author explains the double-declining-balance method of depreciation, wherein the book value of the long-term asset is decreased by a fixed rate.

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the annual depreciation expense, accumulated depreciation, and the book value for each of the estimated four years of use by double-declining-balance method.

To journalize: the entry to record the sale of equipment for $18,000 under the double-declining-balance method.

To journalize: the entry to record the sale of equipment for $10,500 under the double-declining-balance method.

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