Skysong Ltd. purchased a new delivery truck on January 1, 2023. The truck cost $104,600 and was estimated to have a residual value of $1,000. It was estimated that the truck would be driven 518,000 kilometres for the company over its useful life of five years. During 2023, the truck was driven 95,100 kilometres, and 128,800 kilometres in 2024. Calculate depreciation expense for 2023 and 2024. (Round depreciation expense per kilometre to 2 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 5,275.) Depreciation expense $ 2023 19,020 2024

Skysong Ltd. purchased a new delivery truck on January 1, 2023. The truck cost $104,600 and was estimated to have a residual value of $1,000. It was estimated that the truck would be driven 518,000 kilometres for the company over its useful life of five years. During 2023, the truck was driven 95,100 kilometres, and 128,800 kilometres in 2024. Calculate depreciation expense for 2023 and 2024. (Round depreciation expense per kilometre to 2 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 5,275.) Depreciation expense $ 2023 19,020 2024

Name: Skysong Ltd. purchased a new delivery truck on January 1, 2023. The t
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Description: Skysong Ltd. purchased a new delivery truck on January 1, 2023. The truck cost $104,600 and was estimated to have a residual valueof $1,000. It was estimated that the truck would be driven 518,000 kilometres for the company over its useful life of f

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4EB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

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Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
Metlock, Inc. purchased a delivery truck for $30,000 on January 1, 2022. The truck has an expected salvage value of $3,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,400 in 2022 and 12,500 in 2023. Calculate depreciable cost per mile under units-of-activity method.
(b) X Your answer is incorrect. For tax purposes, the asset is considered eligible equipment for the Accelerated Investment Incentive. The asset's CCA rate is 30%. Calculate the CCA for 2023 and 2024. Capital Cost Allowance (CCA) $ 2023 5670 A 2024 9639
Cheyenne Corp. purchased a delivery truck for $42,000 on January 1, 2022. The truck has an expected salvage value of $9,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,600 in 2022 and 10,000 in 2023. Calculate depreciable cost per mile under units-of-activity method.
On January 1, 2018, Wasson Company purchased a delivery vehicle costing $40,000. The vehicle has an estimated 3-year life and a $4,000 residual value. Wasson estimates that the vehicle will be driven 72,000 miles. What is the vehicle's depreciation expense for the year ended December 31, 2020 assuming Wasson uses the units-of-production depreciation method and the vehicle was driven 35,000 miles during 2018, 25,000 miles during 2019 and 14,000 miles in 2020? Group of answer choices A)$7,000 b)$12,000 C)$7,778 D)$6,667 e)None of the above
Irons Delivery Inc. purchased a new delivery truck for $42,000 on January 1, 2023. The truck is expected to have a $2,000 residual value at the end of its 5-year useful life. Irons uses the units-of-production method of depreciation. Irons expects the truck to run for 150,000 miles. The actual miles driven in 2023 and 2024 were 42,000 and 36,000, respectively.
Marigold Corporation purchased a truck at the beginning of 2023 for $47,800. The truck is estimated to have a residual value of $3,000 and a useful life of 280,000 km. It was driven for 66,000 km in 2023 and 76,000 km in 2024. (a) Your answer is correct. Calculate depreciation expense for 2023 and 2024 using the units of production method. (Round depreciation per km to 4 decimal places, e.g. 15.1254 and round final answers to O decimal places, e.g. 5,275.) Depreciation expense $ 2023 10560 $ 2024 12160