Highsmith Rental Company purchased an apartment building early in 2021. There are 20 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available: Appliance Cost Residual Value Service Life (in Years) Stoves $ 51,000 $ 9,000 6 Refrigerators 46,000 1,000 5 Dishwashers 44,000 9,000 4 In 2024, three new refrigerators costing $4,500 were purchased for cash. In that same year, the old refrigerators, which originally cost $5,100, were sold for $2,000. Required: 1. Calculate the group depreciation rate, group life, and depreciation for 2021. 2. Prepare the journal entries to record the purchase of the new refrigerators and the sale of the old refrigerators.

Highsmith Rental Company purchased an apartment building early in 2021. There are 20 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available: Appliance Cost Residual Value Service Life (in Years) Stoves $ 51,000 $ 9,000 6 Refrigerators 46,000 1,000 5 Dishwashers 44,000 9,000 4 In 2024, three new refrigerators costing $4,500 were purchased for cash. In that same year, the old refrigerators, which originally cost $5,100, were sold for $2,000. Required: 1. Calculate the group depreciation rate, group life, and depreciation for 2021. 2. Prepare the journal entries to record the purchase of the new refrigerators and the sale of the old refrigerators.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 38P

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Highsmith Rental Company purchased an apartment building early in 2018. There are 20 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciationmethod for the appliances. The following data are available:Appliance CostResidualValueService Life(in years)Stoves $15,000 $3,000 6Refrigerators 10,000 1,000 5Dishwashers 8,000 500 4In 2021, three new refrigerators costing $2,700 were purchased for cash. The old refrigerators, which originallycost $1,500, were sold for $200.Required:1. Calculate the group depreciation rate, group life, and depreciation for 2018.2. Prepare the journal entries to record the purchase of the new refrigerators and the sale of the old refrigerator
Highsmith Rental Company purchased an apartment building early in 2024. There are 20 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available: Appliance Cost Residual Value Service Life (in Years) Stoves $ 19,000 $ 4,000 6 Refrigerators 14,000 3,000 5 Dishwashers 12,000 2,000 4 In 2027, three new refrigerators costing $2,900 were purchased for cash. In that same year, the old refrigerators, which originally cost $1,900, were sold for $400. Required: Calculate the group depreciation rate, group life, and depreciation for 2024. Prepare the journal entries to record the purchase of the new refrigerators and the sale of the old refrigerators.
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