Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 9, Problem 9.29E
Measuring asset cost, units-of-production
Pact Trucking Corporation uses the
When acquired in 2013, the rig cost $450,000 and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $120,000. The truck was driven 82,000 miles in 2013, 122,000 miles in 2014, and 162,000 miles in 2015. After 39,000 miles, on March 15, 2016, the company traded in the Mack truck for a less expensive Freightliner. Pact also paid cash of $27,000. Fair market value of the Mack truck was equal to its net book value on me date of the trade.
Requirements
1. Record the
2. Determine Pact's Cost of me new truck.
3. Record the journal entry for the exchange of assets on March 15, 2016. Assume the exchange had commercial substance.
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Promise Trucking Corporation uses the units-of-production depreciation method because units-of-production best measures wear and tear on the trucks. Consider these facts about one Mack truck in the company's fleet.
data facts:
When acquired in 2015, the rig cost $370,000and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was
$140,000.
The truck was driven 85,000 miles in 2015, 125,000miles in 2016, and 165,000 miles in 2017.After 40,000 miles, on March 15, 2018, the company traded in the Mack truck for a less expensive Freightliner.
Promise
also paid cash of $28,000.Fair market value of the Mack truck was equal to its net book value on the date of the trade.
Requirements:
1.
Record the journal entry for depreciation expense in
2018.
2.
Determine
Promise's
cost of the new truck.
3.
Record the journal entry for the exchange of assets on
MarchMarch
15,
2018.
Assume the exchange had commercial substance.
Pact Trucking Corporation uses the units-of-production depreciation method because units-of-production best measures wear and tear on the trucks. Consider these facts about one Mack truck in the company's
fleet
More info
When acquired in 2021, the rig cost $370,000 and was expected to remain in
service for 10 years or 1,000,000 miles. Estimated residual value was $150,000.
The truck was driven 82,000 miles in 2021, 122,000 miles in 2022, and 162,000
miles in 2023. After 41,000 miles, on March 15, 2024, the company traded in the
Mack truck for a less expensive Freightliner. Pact also paid cash of $26,000. Fair
market value of the Mack truck was equal to its net book value on the date of the
trade.
Requirements
1.
2.
3.
D
Record the journal entry for depreciation expense in 2024.
Determine Pact's cost of the new truck.
Record the journal entry for the exchange of assets on March 15, 2024. Assume the
exchange had commercial substance.
- X
Finch Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing
equipment and the potential replacement equipment follows.
Existing Equipment
Cost
Operating expenses*
Salvage value
Market value
Book value
Remaining useful life
$114,000
113,000
22,000
51,000
31,000
Old
8 years
Total cost
Should the equipment be replaced?
Replacement Equipment
$118,000
112,000
11,000
*The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the
useful life of the equipment.
Cost
Operating expenses.
Salvage value
Useful life
Required
Calculate the total relevant cost of existing equipment and the potential replacement equipment. Should the equipment be
replaced?
New
8 years
Chapter 9 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Ch. 9 - Prob. 1QCCh. 9 - Prob. 2QCCh. 9 - Which method almost always produces the most...Ch. 9 - A Celty Airline jet costs 28,000,000 and is...Ch. 9 - A copy machine costs 45,000 when new and has...Ch. 9 - Suppose Print and Photo Center in the preceding...Ch. 9 - Prob. 7QCCh. 9 - Prob. 8QCCh. 9 - Liberty Corporation reported beginning and ending...Ch. 9 - A truck costs 50,000 when new and has accumulated...
Ch. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - What is the difference between a capital...Ch. 9 - Prob. 7RQCh. 9 - Prob. 8RQCh. 9 - How does a business decide which depreciation...Ch. 9 - Prob. 10RQCh. 9 - Prob. 11RQCh. 9 - Prob. 12RQCh. 9 - Prob. 13RQCh. 9 - How is gain o r loss determined when disposing of...Ch. 9 - Prob. 15RQCh. 9 - Prob. 16RQCh. 9 - Prob. 17RQCh. 9 - Prob. 18RQCh. 9 - Prob. 19RQCh. 9 - What does it mean if an exchange of plant assets...Ch. 9 - Determining the cost of an asset Alton Clothing...Ch. 9 - Prob. 9.2SECh. 9 - Prob. 9.3SECh. 9 - Computing second-year depreciation and accumulated...Ch. 9 - Calculating partial-year depreciation On September...Ch. 9 - Prob. 9.6SECh. 9 - Prob. 9.7SECh. 9 - Discarding an asset On May 31, 2016, Choice...Ch. 9 - Selling an asset at gain or loss Mill Creek Golf...Ch. 9 - Selling an asset at gain or loss Pelman Company...Ch. 9 - Accounting for depletion of natural resources...Ch. 9 - Accounting for an intangible asset On March 1,...Ch. 9 - Prob. 9.13SECh. 9 - Prob. 9.14SECh. 9 - Prob. 9.15SECh. 9 - Prob. 9.16SECh. 9 - Prob. 9.17ECh. 9 - Making a lump-sum purchase of assets Dearwood...Ch. 9 - Prob. 9.19ECh. 9 - Computing depreciation-three methods Crackling...Ch. 9 - Changing an asset's useful life and residual value...Ch. 9 - Recording partial-year depreciation and sale of an...Ch. 9 - Prob. 9.23ECh. 9 - Prob. 9.24ECh. 9 - Prob. 9.25ECh. 9 - Prob. 9.26ECh. 9 - Computing asset turnover ratio Snap Dragon Photo...Ch. 9 - Prob. 9.28ECh. 9 - Measuring asset cost, units-of-production...Ch. 9 - Prob. 9.30APCh. 9 - Determining asset cost, recording first-year...Ch. 9 - Recording lump-sum asset purchases, depreciation,...Ch. 9 - Prob. 9.33APCh. 9 - Prob. 9.34APCh. 9 - Journalizing partial-year depreciation and asset...Ch. 9 - Prob. 9.36BPCh. 9 - Determining asset cost, recording rust-year...Ch. 9 - Recording lump-sum asset purchases, depreciation,...Ch. 9 - Prob. 9.39BPCh. 9 - Prob. 9.40BPCh. 9 - Journalizing partial-year depreciation and asset...Ch. 9 - Prob. 9.42CPCh. 9 - Western Bank Trust purchased land and a building...Ch. 9 - Prob. 9.1CTFCCh. 9 - Prob. 9.1CTFSCCh. 9 - In 150 words or fewer, explain the different...
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