Explore Incorporated is a new start-up specializing in renting camper vans. On January 1, Year 1, the company purchased a new camper van with a total cost of $82,000. The company estimates that the van will have a 10-year useful life and a salvage value of $10,000. The company has elected to depreciate the van using the double-declining-balance method. Required: a. Determine the amount of depreciation expense to be recognized on the van at the end of Year 1? b. Determine the amount of accumulated depreciation at the end of Year 2 a. Depreciation at the end of Year 1 b. Accumulated depreciation

Explore Incorporated is a new start-up specializing in renting camper vans. On January 1, Year 1, the company purchased a new camper van with a total cost of $82,000. The company estimates that the van will have a 10-year useful life and a salvage value of $10,000. The company has elected to depreciate the van using the double-declining-balance method. Required: a. Determine the amount of depreciation expense to be recognized on the van at the end of Year 1? b. Determine the amount of accumulated depreciation at the end of Year 2 a. Depreciation at the end of Year 1 b. Accumulated depreciation

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Millar, Inc., purchased a truck to use for deliveries and is attempting to determine how much depreciation expense would be recognized under three different methods. The truck cost 24,000 and is expected to have a value of 4,000 at the end of its five-year life. Instructions a. Determine the amount of depreciation expense by preparing the depreciation schedule for the entire useful life of the asset under the following depreciation methods. 1. Straight-line. 2. Declining balance. 3. Double-declining-balance. b. Prepare the plant assets section of the balance sheet at the end of the second year of the asset's useful life under the straight line and double-declining-balance method, assuming the truck is the only plant asset owned by Millar, Inc.
Can you show me how to do this one? 14. Assume that ABC Company purchased factory equipment on January 1, 2018, for $75,000. The equipment has an estimated life of five years and an estimated residual value of $6,000. ABC’s accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new production process, the equipment will be used to produce 5,000 units in 2018, but production subsequent to 2018 will increase by 5,000 units each year. Calculate the depreciation expense, accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life. Year Depreciation Accumulated Depreciation Book Value Year Depreciation Accumulated Depreciation Book Value
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Colquhoun International purchases a warehouse for $332,000. The best estimate of the salvage value at the time of purchase was $17,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $fill in the blank ae55fc07ff8d04f_1 B. Determine the depreciation expense for the final fifteen years of the asset’s life. $fill in the blank ae55fc07ff8d04f_2 C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank. fill in the blank fill in the blank fill in the blank fill in the blank
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Kelly’s Fitness Center purchased a new step machine for $16,500. The apparatus is expected to last four years and have a residual value of $1,500. Costs to deliver this machine are $3,000, costs to repair it in the second year are totaled as $500.What will the depreciation expense and carrying value be for each year under the straight-line method? Assume that the step machine is depreciated using the double declining-balance method. How much would depreciation expense and carrying value be in each year?
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A company purchased a delivery van for $24,900 with a salvage value of $2,700 on October 1, Year 1. It has an estimated useful life of 6 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1? Multiple Choice O O $3,700. $925. $4,150. $77. $1,383. 83
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate: At time of purchase, annual depreciation was ___ Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the asset’s life: Original cost Depreciation previously taken Book value at beginning of year five Salvage value Revised remaining depreciable cost Revised remaining useful life 15 years Revised annual depreciation Create the depreciation expense journal entry for year five: DR CR