Mercury Inc. purchased equipment in 2019 at a cost of $400,000. The equipment was expected to produce 700,000 units over the next five years and have a residual value of $50,000. The equipment was sold for $210,000 partway through 2021. Actual production in each year was: 2019 = 100,000 units; 2020 = 160,000 units; 2021 = 80,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date.   Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $245,000, calculate the gain or loss on the sale.

Gwynedd Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 1, 2020, the company purchased a machine costing $170,000, and it has an estimated useful life of 15 years and an estimated residual value of $26,000. Depreciation for partial years is rounded to the nearest full month. In 2024, management decided to revise its estimated life from 18 years to 25 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2024. Instructions: a) Prepare journal entries in chronological order for the given events, beginning with the purchase of machinery on January 1, 2020. Record depreciation expense separately for each year 2020 through 2024 (5 separate entries for each year's depreciation) (Hint: record the purchase and annual depreciation for each…

Indigo Corp. purchased machinery for $312,000 on May 1, 2023. It is estimated that it will have a useful life of 10 years, residual value of $12,000, production of 300,000 units, and 25,000 working hours. The machinery will have a physical life of 15 years and a salvage value of $3,000. During 2024, Indigo used the machinery for 2,300 hours and the machinery produced 26,000 units. Indigo prepares financial statements in accordance with IFRS. From the information given, calculate the depreciation charge for 2024 under each of the following methods, assuming Indigo has a December 31 year end. (a) Calculate the depreciation charge for 2024 under straight-line method. Depreciation charge for 2024 $enter the depreciation charge for 2024 in dollars (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c) The parts of this question must be completed in order. This part will be available when you complete the part above. (d)…

Early in January 2019, Tellco Inc. acquired a new machine and incurred $11,000 of interest, installation, and overhead costs that should have been capitalized but were expensed. The company earned net operating income of $89,000 on average total assets of $782,000 for 2019. Assume that the total cost of the new machine will be depreciated over 10 years using the straight-line method. Required: a. Calculate the ROI for Tellco for 2019. b. Calculate the ROI for Tellco for 2019, assuming that the $11,000 had been capitalized and depreciated over 10 years using the straight-line method. (Hint: There is an effect on net operating income and average assets.) c. Given your answers to parts a and b. why would the company want to account for this expenditure as an expense? d. Assuming that the $11,000 is capitalized, what will be the effect on ROI for 2020 and subsequent years, compared to expensing the interest, installation, and overhead costs in 2019? Complete this question by entering your…

Fleet Sports purchased a production machine with a cost of $180,000 at the beginning of 2019. Transportation costs to get the machine ready were $5,000. An additional $15,000 of labor costs were incurred to assemble the machine. The equipment has an estimated life of 10 years or 100,000 snowboards (units of product). The estimated residual value is $20,000. During 2019, 17,000 snowboards (units of product) were produced with this machinery. Determine the following, and show your work: 4.What is the book value of the equipment at the end of 2020 using straight-line depreciation? 5.What is depreciation expense for the equipment at the end of 2019 using double-declining balance depreciation? 6What journal entry is needed at the end of 2020 to record depreciation expense using double-declining balance depreciation?

Coronado Manufacturing purchased a machine on January 1, 2023 for use in its factory. Coronado paid $512,000 for the machine and estimated that it had a useful life of 10 years, at the end of which time the machine was expected to have a residual value of $50,000. During its life, the machine was expected to produce 280,000 units. During 2023, the machine produced 31,500 units, and produced 42,600 in 2024. The machine was subject to a 20% CCA rate, and Coronado's year-end was December 31. The machine is eligible for the Accelerated Investment Incentive.

Blossom Company purchased a large piece of equipment on October 1, 2023. The following information relating to the equipment was gathered at the end of October: Price Credit terms $40,000 2/10, n/30 Engineering costs $3,000 Maintenance costs during regular production operations $6,000 It is expected that the equipment could be used for 12 years, after which the salvage value would be zero. Blossom intends to use the equipment for only 10 years, however, after which it expects to be able to sell it for $2,600. The equipment was delivered on October 1 and the invoice for the equipment was paid on October 9, 2023. Blossom uses the calendar year to prepare financial statements. Blossom follows IFRS for financial statement purposes. (a) Calculate the depreciation expense for the years indicated using the following methods. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.) 1. Straight-line method for 2023 $ 2. Sum-of-the-years'-digits method for…

At the beginning of 2019, Robotics Inc. acquired a manufacturing facility for $13.9 million. $10.9 million of the purchase price was allocated to the building. Depreciation for 2019 and 2020 was calculated using the straight-line method, a 25-year useful life, and a $2.9 million residual value. In 2021, the company switched to the double-declining-balance depreciation method.What is depreciation on the building for 2021?   Answer is not complete.       Depreciation not attempted

Irwin, Inc. constructed a machine at a total cost of $39 million. Construction was completed at the end of 2017 and the machine was placed in service at the beginning of 2018. The machine was being depreciated over a 10-year life using the straight-line method. The residual value is expected to be $3 million. At the beginning of 2021, Irwin decided to change to the sum-of-the-years’-digits method. Ignoring income taxes, prepare the journal entry relating to the machine for 2021.

The cost of equipment purchased by Concord, Inc., on April 1, 2020, is $127,00O. It is estimated that the machine will have a $7,000 salvage value at the end of its service life. Its service life is estimated at 6 years; its total working hours are estimated at 40,000; and its total production is estimated at 480,000 units. During 2020, the machine was operated 3,500 hours and produced 48,000 units. During 2021, the machine was operated 5,600 hours and produced 55,000 units. Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 (a) Straight-line 2$ 24 (b) Units-of-output %24 24 (c) Working hours 24 (d) Sum-of-the-years'-digits 24 (e) Double-declining-balance (twice the straight-line rate) 24 2$ %24 %24