QuestionWesley Co. purchased an equipment on April 1, 2013. It has an expected life of 20 years andno residual value. The company's financial year ended on December 31. The followingexpenditures were associated with the purchase:Cost of equipmentFreight chargesSales taxes$120,0005,2007,80027,000Installation of equipmentRequired:(SHOW WORKINGS)Compute the depreciation expense for Years 2013 and 2014, using(i)the straight-line method with fractional years rounded to the nearest whole month;(ii)the 150% declining balance and using the half-year convention.

Formula: Straight line method: ( Cost of Asset - Salvage value ) / Useful life years Deduction of…

Answered: Question Wesley Co. purchased an…

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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Duluth Ranch, Incorporated purchased a machine on January 1, 2021. The cost of the machine was $44,000. Its estimated residual value was $14,000 at the end of an estimated 5-year life. The company expects to produce a total of 20,000 units. The company produced 1,600 units in 2021 and 2,050 units in 2022. Required: a. Calculate depreciation expense for 2021 and 2022 using the straight-line method. b. Calculate the depreciation expense for 2021 and 2022 using the units-of-production method. c. Calculate depreciation expense for 2021 through 2025 using the double-declining balance method. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the depreciation expense for 2021 and 2022 using the units-of-production method. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar.) 2021 2022 Depreciation Expense
Navigation Inc. acquired an equipment on January 1, 2014 at a cost of $2,200,000 including an estimated residual value of $200,000 and twenty (20) years estimated useful life. The replacement cost of the equipment is $2,400,000 on December 30, 2017. The depreciated replacement cost declined to $1,470,000 after two years. If there is a need to gross up, round off percentage to whole number and to nearest dollar. Questions: 1. What is the carrying amount of the equipment on December 31, 2020?2. What is the balance of the revaluation surplus immediately after revaluation?
Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of $12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST. Required: a) Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2019–20 using each of the following depreciation methods  straight-line  diminishing balance (depreciation rate has been calculated as 31%)  units of production (assume the van was driven 78,000 kilometres during the financial year) b) Record the adjusting entries for the depreciation at 30 June 2021 using diminishing balance method. c) Show how the van would appear in the balance sheet prepared at the end of year 2 using Straight-line method. June 1 4 Purchases 9 Sales 12 Purchases 21 Sales 26 Purchases Inventory all purchases and sales are on credit.
Asset ImpairmentGreen Light Ltd (GLL) tested a machine for impairment on 31 December 2018. The machine was carried at depreciated historical cost, and its carrying amount was $150,000. It had an estimated remaining useful life of 10 years. GLL's accounting policy required all property, plant and equipment's recoverable amount was determined on the basis of value-in-use calculation, using a discount rate of 15%. The management of GLL estimated the future net cash flows of the machine using reasonable assumptions. The following information related to future net cash flows of the machine was available at the end of 2018. Year Future net cash flow ('000)2019 22,1652020 21,4502021 20,5502022 24,7252023 25,3252024 24,8252025 24,1232026 25,5332027 24,2342028 22,850 Suppose in the years 2019-2021, no event occurred that required the machine's recoverable amount to be re-estimated. On 31 December 2022, costs of $25,000 were incurred to enhance the machine's performance. Revised estimated…
Required information [The following information applies to the questions displayed below.] On April 1, Cyclone Company purchases a trencher for $320,000. The machine is expected to last five years and have a salvage value of $60,000. Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the straight-line method. Choose Numerator: Choose Denominator: Annual Depreciation Fraction of Year Depreciation Expense Year First year Second year Annual Depreciation X = Annual depreciation
On December 31,2015, DAVE Corporation purchased an equipment with an estimated useful life of 10 years. The equipment was expected to have a residual value of $10,000 at the end of its service life. The sum-of -the-years-digits method was used in computing depreciation. For the year ended December 31,2020, DAVE recorded depreciation expense of $36,000. What was the acquisition cost of the equipment?

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