None Crane Company uses the straight-line method of depreciation. The company's fiscal year end is December 31. The followingtransactions occurred during 2025.Purchased equipment from the Windsor Company on account for $10,700 plus sales tax of $975 and shipping costs of$225.Jan. 1May 13Dec. 31Recorded 2025 depreciation on the basis of a 3-year life and estimated salvage value of $4,550.Paid for $140 routine maintenance on the equipment.Prepare the necessary entries. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit accounttitles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)DateAccount Titles and ExplanationJan. 1EquipmentGain on Disposal of Plant AssetsMay 13Maintenance and Repairs ExpenseiDebit11,900140Credit11,900

Name: None Crane Company uses the straight-line method of depreciation. The
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Description: None Crane Company uses the straight-line method of depreciation. The company's fiscal year end is December 31. The followingtransactions occurred during 2025.Purchased equipment from the Windsor Company on account for $10,700 plus sales tax of $975

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Crane Company uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions occurred during 2025. Jan. 1 May 13 Dec. 31 Purchased equipment from the Windsor Company on account for $10,700 plus sales tax of $975 and shipping costs of $225. Paid for $140 routine maintenance on the equipment. Recorded 2025 depreciation on the basis of a 3-year life and estimated salvage value of $4,550. the necessary entries. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account

Crane Company uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions occurred during 2025. Jan. 1 May 13 Dec. 31 Purchased equipment from the Windsor Company on account for $10,700 plus sales tax of $975 and shipping costs of $225. Paid for $140 routine maintenance on the equipment. Recorded 2025 depreciation on the basis of a 3-year life and estimated salvage value of $4,550. the necessary entries. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account

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 11E: On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated...

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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.
Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
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.
Group and Composite Depreciation Chcadle Company purchased a fleet of 20 delivery trucks for 8,000 each on January 2, 2019. It decided to use composite depreciation on a straight-line basis and calculated the depreciation from the following schedule: Cheadle actually retired the trucks according to the following schedule (assume each truck was retired at the beginning of the year): Required: 1. Prepare the journal entries necessary to record the preceding events. 2. Assume that the company expected all the trucks to last 4 years and be retired for 1,600 each. Using group depreciation, prepare journal entries for all 6 years, assuming the company retired the trucks as shown by the latter schedule.
Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.