Required information(The following information applies to the questions displayed below}On January 1, 2021, the Allegheny Corporation purchased equipment for $128.000. The estimated service life of theequipment is 10 years and the estimated residual value is $7,000. The equipment is expected to produce 200,000units during its life.Required:Calculate depreciation for 2021 and 2022 using each of the following methods.1. Straight-line.Straight-Line DepreciationAnnual DepreciationExpenseChoose Numerator:Choose DenominatorFormulaDepreciation ExpenseAmountsDepreciation Expense202120222. Double-declining-balance.Double-Declining-Balance MethodFormulaDepreciation ExpenseAmount for 2021Amount for 20223. Units of production (units produced in 2021, 31,000; units produced in 2022, 26,000). (Round "Depreciation per unit rate"answers to 2 decimal places.)Select formula for Units of Production Depreciation:Calculate 2021 depreciation expenseDepreciation per unit rateUnits produced in 2021Depreciation in 2021Calcutate 2022 depreciation expense:Depreciation per unt rateUnts produced in 2022Depreciation in 2022

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Description: Required information(The following information applies to the questions displayed below}On January 1, 2021, the Allegheny Corporation purchased equipment for $128.000. The estimated service life of theequipment is 10 years and the estimated residual

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Required information (The following information applies to the questions displayed below) On January 1, 2021, the Allegheny Corporation purchased equipment for $128,000. The estimated service life of the equipment is 10 years and the estimated residual value is $7,000. The equipment is expected to produce 200,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods. . Straight-line. Straight-Line Depreciation Annual Depreciation Expense Depreciation Expense Choose Numerator: Choose Denominator Formula Amounts Depreciation Expense 2021 2022 Double declining-balance. Deuble-Declining-Balance Method Formula Depreciation Expense Amount for 2021 Amount for 2022 Units of production (units produced in 2021, 31,000; units produced in 2022, 26,000), (Round "Depreciation per unit ra nswers to 2 decimal places.) Select formula for Units of Production Depreciation: Calculate 2021 depreciation expense Depreciation per unit rate Units produced in 2021 Depreciation in 2021 Calculate 2022 depreciation expense: Depreciation per unit rate Units produced in 2022 Depreciation in 2022

Required information (The following information applies to the questions displayed below) On January 1, 2021, the Allegheny Corporation purchased equipment for $128,000. The estimated service life of the equipment is 10 years and the estimated residual value is $7,000. The equipment is expected to produce 200,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods. . Straight-line. Straight-Line Depreciation Annual Depreciation Expense Depreciation Expense Choose Numerator: Choose Denominator Formula Amounts Depreciation Expense 2021 2022 Double declining-balance. Deuble-Declining-Balance Method Formula Depreciation Expense Amount for 2021 Amount for 2022 Units of production (units produced in 2021, 31,000; units produced in 2022, 26,000), (Round "Depreciation per unit ra nswers to 2 decimal places.) Select formula for Units of Production Depreciation: Calculate 2021 depreciation expense Depreciation per unit rate Units produced in 2021 Depreciation in 2021 Calculate 2022 depreciation expense: Depreciation per unit rate Units produced in 2022 Depreciation in 2022

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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Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?
Cost of Asset and Depreciation Method Heist Company purchased a machine on January 2, 2019, and uses the 150%-declining-balance depreciation method. The machine has an expected life of 10 years and an expected residual value of 5,000. The following costs relate to the acquisition and use of the machine during the first year of its operations: Required: 1. Compute the depreciation expense for 2019 and 2020. 2. Next Level What is the effect on the financial statements if the company used the straight-line method instead of the 150%-declining-balance method?
Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of 20,000. Required: Compute the depreciation expense for 2019 under each of the following methods: 1. straight-line 2. sum-of-the-years-digits 3. double-declining-balance 4. Next Level What effect does the depreciation of the equipment have on the analysis of rate of return?
Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
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.
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.
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
Required information [The following information applies to the questions displayed below.] On October 1, 2024, the Allegheny Corporation purchased equipment for $134,000. The estimated service life of the equipment is 10 years and the estimated residual value is $2,000. The equipment is expected to produce 240,000 units during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. 2. Double-declining-balance. Formula Amount for 2024 Amount for 2025 Beginning Book Value $ $ 134,000 240,000 ✔K Answer is complete but not entirely correct. Double-Declining-Balance Method Double the Straight-line Rate 2 2 % % X X Fraction of Year 6/12 X- 10/12 X- Depreciation Expense $ $ 100,000 100,000 x
Required information [The following information applies to the questions displayed below.] On October 1, 2024, the Allegheny Corporation purchased equipment for $115,000. The estimated service life of the equipment is 10 years and the estimated residual value is $5,000. The equipment is expected to produce 220,000 units during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. 1. Straight-line. Formula Amounts Year 2024 2025 Choose Numerator: Annual Depreciation Straight-Line Depreciation ++ + X X X Choose Denominator: Fraction of Year = E = Annual Depreciation Annual Depreciation Depreciation expense
Required information [The following information applies to the questions displayed below] On October 1, 2024, the Allegheny Corporation purchased equipment for $299,000. The estimated service life of the equipment is 10 years and the estimated residual value is $2,000. The equipment is expected to produce 540,000 units during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. 1. Straight-line. Formula Amounts Year 2024 2025 Choose Numerator: Annual Depreciation Straight-Line Depreciation Choose Denominator: Fraction of Year B M Annual Depreciation Annual Depreciation Depreciation expense
Required information [The following information applies to the questions displayed below.] On October 1, 2024, the Allegheny Corporation purchased equipment for $299,000. The estimated service life of the equipment is 10 years and the estimated residual value is $2,000. The equipment is expected to produce 540,000 units during its life. Required: Calculate depreciation for 2024 and 2025 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. 3. Units of production (units produced in 2024, 27,000; units produced in 2025, 42,000). Note: Round "Depreciation per unit rate" answers to 2 decimal places. Select formula for Units of Production Depreciation: Calculate 2024 depreciation expense Depreciation per unit rate Units produced in 2024 Depreciation in 2024 Calculate 2025 depreciation expense Depreciation per unit rate Units produced in 2025 Depreciation in 2025