On April 1, 2023, Ice Drilling Co. purchased a trencher for $140,000. The machine was expected to last five years and have a residual value of $14,000. Required: Calculate depreciation expense for 2023 and 2024 to the nearest month, using (a) the straight-line method, and (b) the double- declining-balance method. The company has a December 31 year-end. (Do not round intermediate calculations.) Year Straight-Line Double-Declining-Balance 2023 S 25,200 2024 $ 25,200

On April 1, 2023, Ice Drilling Co. purchased a trencher for $140,000. The machine was expected to last five years and have a residual value of $14,000. Required: Calculate depreciation expense for 2023 and 2024 to the nearest month, using (a) the straight-line method, and (b) the double- declining-balance method. The company has a December 31 year-end. (Do not round intermediate calculations.) Year Straight-Line Double-Declining-Balance 2023 S 25,200 2024 $ 25,200

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 10E: Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual...

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Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
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.
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.
During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.
At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
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.
Crane Ltd. purchased a delivery truck on January 1, 2021, at a cost of $83,920. The truck is expected to have a residual value of $8,070 at the end of its 4-year useful life. Crane has a December 31 year end. Use the diminishing-balance method and assume the depreciation rate is equal to double the straight-line rate. (a) Calculate the depreciation for each year of the truck's life. (Round answers to O decimal places, e.g. 5,275.) Depreciation expense 2021 $ 2022 2$ 2023 $ 2024 $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
Sandhill Ltd. purchased a delivery truck on January 1, 2021, at a cost of $80,640. The truck is expected to have a residual value of $7,380 at the end of its 4-year useful life. Sandhill has a December 31 year end. Use the diminishing-balance method and assume the depreciation rate is equal to double the straight-line rate Calculate the depreciation for each year of the truck’s life. (Round answers to 0 decimal places, e.g. 5,275.) Depreciation expense 2021 $enter a dollar amount 2022 $enter a dollar amount 2023 $enter a dollar amount 2024 $enter a dollar amount
Freedom Co. purchased a new machine on July 2, 2019, at a total installed cost of $41,000. The machine has an estimated life of five years and an estimated salvage value of $6,700.Required: Calculate the depreciation expense for each year of the asset's life using A. Straight-line depreciation. B. Double-declining-balance depreciation. How much depreciation expense should be recorded by Freedom Co. for its fiscal year ended December 31, 2019, under each method? (Note: The machine will have been used for one-half of its first year of life.) Calculate the accumulated depreciation and net book value of the machine at December 31, 2020, under each method.
Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The residual value of these assets is estimated at $10,000 at the end of their 4-year service life. Golden Sales managers want to evaluate the options of depreciation. al. Compute the annual straight-line depreciation. a2. Provide the sample depreciation journal entry to be posted at the end of each of the years. If an amount box does not require an entry, leave it blank. Dec. 31 b. Prepare the journal entries for each year of the service life for these assets using the double-declining balance method. If an amount box does not require an entry, leave it blank. Year 1, Dec. 31 Year 2, Dec. 31 Year 3, Dec. 31 Year 4, Dec. 31
On June 30, 2018, Clooney Printers purchased a printer for $59,000. It expects the printer to last for four years and have a residual value of $9,000. Compute the depreciation expense on the printer for the year ended December 31, 2018, using the straight – line method. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) A. $12,500 O B. $14,750 C. $7,292 D. $6,250 n Tools