Splish Company purchases equipment on January 1, Year 1, at a cost of $612,000. The asset is expected to have a service lifeof 12 years and a salvage value of $55,080.(a)Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers toO decimal places, e.g. 5,125.)Your answer is correct.Depreciation for Year 2(b)Depreciation for Year 1Depreciation for Year 3(c)eTextbook and MediaDepreciation for Year 1Your answer is correct.Depreciation for Year 2Depreciation for Year 3$eTextbook and Media$$Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years-digits method.Depreciation for Year 2$$$Depreciation for Year 1 $46,410$46,410Depreciation for Year 3 $46,41085.68078.540Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Rounddepreciation rate to 2 decimal places, e.g. 15.84% and final answers to 0 decimal places, e.g. 45,892.)Attempts: 1 of 3 used71,400Attempts: 1 of 3 used

Name: Splish Company purchases equipment on January 1, Year 1, at a cost of
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Description: Splish Company purchases equipment on January 1, Year 1, at a cost of $612,000. The asset is expected to have a service lifeof 12 years and a salvage value of $55,080.(a)Compute the amount of depreciation for each of Years 1 through 3 using the stra

Given, Cost = $612,000 Useful life = 12 years Double declining rate = 1/Useful life*2

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Splish Company purchases equipment on January 1, Year 1, at a cost of $612,000. The asset is expected to have a service life of 12 years and a salvage value of $55,080. (a) Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to O decimal places, eg. 5,125.) Your answer is correct. Depreciation for Year 2 (b) Depreciation for Year 1 Depreciation for Year 3 eTextbook and Media (c) Depreciation for Year 1 Depreciation for Year 2 Your answer is correct. $ eTextbook and Media $ $ Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years-digits method. Depreciation for Year 3 $ Depreciation for Year 2 Depreciation for Year 3 $ $ Depreciation for Year 1 $ 46,410 $ 46,410 $ 46,410 Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Round depreciation rate to 2 decimal places, eg 15.84% and final answers to 0 decimal places, e.g. 45,892) 78.540 Attempts: 1 of 3 used 71,400 Attempts: 1 of 3 used

Splish Company purchases equipment on January 1, Year 1, at a cost of $612,000. The asset is expected to have a service life of 12 years and a salvage value of $55,080. (a) Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to O decimal places, eg. 5,125.) Your answer is correct. Depreciation for Year 2 (b) Depreciation for Year 1 Depreciation for Year 3 eTextbook and Media (c) Depreciation for Year 1 Depreciation for Year 2 Your answer is correct. $ eTextbook and Media $ $ Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years-digits method. Depreciation for Year 3 $ Depreciation for Year 2 Depreciation for Year 3 $ $ Depreciation for Year 1 $ 46,410 $ 46,410 $ 46,410 Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Round depreciation rate to 2 decimal places, eg 15.84% and final answers to 0 decimal places, e.g. 45,892) 78.540 Attempts: 1 of 3 used 71,400 Attempts: 1 of 3 used

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....

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A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.
Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.
Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Dunedin 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.
Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the life of the truck two years beyond the original estimated life. Related information is provided below. Cost of truck 65,000 Salvage value 5,000 Original estimated life 6 years The truck was purchased on January 1, 20-1. The engine was replaced on January 1, 20-6. Using straight-line depreciation, compute depreciation expense for 20-6.
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.