FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Required information Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $243,000 including installation. The company estimates that the equipment will have a residual value of $28,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 2 3 Year 1 4 3556NH 5 6 2 4 Problem 7-5A (Algo) Part 3 Hours Used 2,700 2,000 2,100 3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.) 1,900 1,700 2,100 UNIVERSITY CAR WASH Depreciation Schedule-Activity-Based End of Year Amounts Accumulated Depreciation Depreciation Expense Book Valuearrow_forward7arrow_forwardcoparrow_forward
- Delta Machine Company purchased a computerized assembly machine for $108,000 on January 1 Year 1 Delta Machine Company estimated that the machine would have a life of four years and a $11,000 salvage value: Delta Machine Company uses the straight-line method to compute depreciation expense. At the beginning of Year 3 Delta discovered that the machine was quickly becoming. obsolete and would have little value at the end of its useful life Consequently, Delta Machine Company revised the estimated salvage to only $3,000. It did not change the estimated useful life of the machine Compute the depreciation expense for each of the four years Years Year 12 Year 2 Year 3 Year 4 Depreciation Expensearrow_forwardAUBURN CAR WASH Cost of new car wash machines: $800,000 Estimated residual value: $ 50,000Machine life in years :5 Machine life in hours: 10,000 Actual use per year: Year Hours used 1 2,000 2 1, 800 3 2,200 4 2, 100 5 1,900 Use the information on the Given Data worksheet to prepare three depreciation schedules using the following methods: straight- line, double - declining balance, and activity - based. Auburn Car Wash Straight Line If you hover your mouse over a cell with a red flag you will see the comment Auburn Car Wash Double - Declining - Balance If you hover your mouse over a cell with a red flag you will see the comment Note: for year 5 you must make the year end book value equal to the Residual Value Therefore you will need to take the beginning book value less the Residual Value Auburn Car Wash Activity - Based When you have completed all three schedules answer the following question. What do you observe about the Book Value at the end of the 5th year for all three methods?…arrow_forwardRequired information Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 2 3 4 Year 1 2 3 4 5 5 6 Hours Used 2,900 1,800 1,900 2,100 Problem 7-5A (Algo) Part 1 1,900 1,900 Required: 1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Straight-Line End of Year Amounts Depreciation Expense Accumulated Depreciation Book Value Sarrow_forward
- Ee 27.arrow_forwardA machine was purchased at an original cost of P3,250,114 with a salvage value of P386.985. The machine is expected to perform for 365,281 hours and can produce total units of 574,125. The machine has the following outputs: First year: H-20.243 hours O-45,754 units Second year: H-19,854 hours 0-41,658 units Third year: H-19.895 hours 0-42.036 units Fourth year H-17.856 hours O-36.025 units Determine the following: A)Book value at the end of four years using Service-Output Method. B.)Total depreciation at the end of 2nd year using Working-Hours Method. C.)Book value at the end of three years using Working-Hours Method. (Please provide detailed solution not in excel, thank you)arrow_forwardRequired information Problem 10-6A (Algo) Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below.] Onslow Company purchased a used machine for $192,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine. Onslow paid an additional $1,600 on January 4 to secure the machine for operation. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. Problem 10-6A (Algo) Part 1 Required: 1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurred. View transaction list Journal entry worksheetarrow_forward
- Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $44,200. The machine's useful life is estimated at 10 years, or 392,000 units of product, with a $5,000 salvage value. During its second year, the machine produces 33,200 units of product. Exercise 8-6 (Algo) Double-declining-balance depreciation LO P1 Determine the machine's second-year depreciation using the double-declining-balance method. First year's depreciation Second year's depreciation Double-declining-balance Depreciation Choose Factors: X Choose Factor(%) Annual Depreciation Expense = Depreciation expense =arrow_forwardmework Assignment i es C CON Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Exercise 8-4 Straight-line depreciation LO P1 Esc Straight-Line Depreciation Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $47,500. The machine's useful life is estimated at 10 years, or 405,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 34,500 units of product. Determine the machine's second-year depreciation and year end book value under the straight-line method. Choose Numerator: / Cost minus salvage $ Year 2 Depreciation Year end book value (Year 2) F1 F2 40,500/ Estimated useful life (years) $ ✔ F3 Choose Denominator: # Dashboard F4J 10 4,050 Prev. F5 % = = E Paraphrasing Tool .... Annual Depreciation Expense 1 Depreciation expense $ Saved S 2 3 F6 G A C logitech 4,050 of 9 F7 & Excelsior…arrow_forward4. Subject :-Accountingarrow_forward
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