On January 1, 2024, Canseco Plumbing Fixtures purchased equipment for $38,000. Residual value at the end of an estimated 7year service life is expected to be $10,000. The company expects the equipment to operate for 12,000 hours.Required:a. Calculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchasedon January 1, 2024.b. Calculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchasedon March 31, 2024.Complete this question by entering your answers in the tabs below.Required ARequired BCalculate depreciation expense for 2024 and 2025 using sum-of-the-years'-digits, assuming the equipment was purchased onJanuary 1, 2024.Sum-of-the-years' digits depreciation20242025DepreciableBasexRate perYear=DepreciationExpensexx=< Required ARequired B >

Step 1: Sum of the years' digits method For the sum of the years' digits method, you'll have to get…

Answered: On January 1, 2024, Canseco Plumbing…

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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On April 1, 2020, Saiqa Qureshi Industries purchased new equipment at cost of Rs. 325,000. Useful life of the equipment was estimated at 5 years, with residual value of Rs. 25,000. Required: Compute the annual depreciation expense for each year under each depreciation method listed below using half year convention method: i. Straight- line method (Using half year convention). ii. 150% declining-balance method (Using full year convention). iii. 200% declining balance method (Using half year convention method switching to straight line).
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On January 2, 2021, Morales Paint Company purchased a truck that cost $60,000 with a residual value of $2,500. The expected useful life of the truck is 4 years and 100,000 miles. It is expected to be driven 13,000 miles in the first year; 40,000 miles the second year; 27,000 miles in the third year and 20,000 miles in the fourth year. A. Prepare a depreciation schedule for the asset’s entire useful life using each of the following methods: Straight Line Production (Units of Production) Double Declining Balance B. Prepare the journal entry to record depreciation expense for year 2 for each of the Depreciation Methods (a total of 3 journal entries). C. Assume that the company decided to sell the equipment in year 3 for $15,000 in cash. Prepare the required journal entry for each of the Depreciation Methods (a total of 3 journal entries).
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