On April 22, 2023, Cullumber Enterprises purchased equipment for $143,500. The company expects to use the equipment for 12,500 working hours during its four-year life and that it will have a residual value of $13,500. Cullumber has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 2,000 hours in 2023; 3,000 hours in 2024; 3,600 hours in 2025; 2,700 hours in 2026; and 1,400 hours in 2027. a) Prepare a depreciation schedule for the life of the asset under the straight-line method.

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Swindall 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 11, 2017, the company purchased a machine costing $117,000. The machine's useful life was estimated to be 12 years with an estimated residual value of $17,200. Depreciation for partial years is recorded to the nearest full month. In 2021, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years to 20 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, 2021. a. Prepare journal entries in chronological order for the given events, beginning with the purchase of the machinery on January 11, 2017. Show separately the recording of depreciation expense in 2017 through 2021. (Do not round intermediate calculations. Round…

On January 1, 2025, a machine was purchased for $1,040,000 by Metlock Co. The machine is expected to have an 8-year life with no salvage value. It is to be depreciated on a straight-line basis. The machine was leased to Ivanhoe Inc. for 3 years on January 1, 2025, with annual rent payments of $260,000 due at the beginning of each year, starting January 1, 2025. The machine is expected to have a residual value at the end of the lease term of $562,500, though this amount is unguaranteed. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. How much should Metlock report as income before income tax on this lease for 2025? Income before income tax $ (b) eTextbook and Media List of Accounts Date 130,000 Record the journal entries Ivanhoe would record for 2025 on this lease, assuming its incremental borrowing rate is 5% and the rate implicit in the lease is unknown. (List all debit entries…