Horngren's Accounting (12th Edition)
12th Edition
ISBN: 9780134486444
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem E10.20E
Computing
Learning Objective 2
1. Double-declining-balance, 12/31/19, Exp. $8,250
Crispy Fried Chicken bought equipment on January 2, 2018, for $33,000. The equipment was expected to remain in service for four years and to operate for 6,750 hours. At the end of the equipment’s useful life, Crispy’s estimates that its residual value will be $6,000. The equipment operated for 675 hours the first year, 2,025 hours the second year, 2,700 hours the third year, and 1,350 hours the fourth year.
Requirements
- Prepare a schedule of depreciation expense,
accumulated depreciation , ad book value per year for the equipment under the three depreciation methods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared. - Which method tracks the wear and tear on the equipment most closely?
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E10-20 Computing depreciation three methods
Learning Objective 2
1. Double-declining-balance, 12/31/17, Exp. $5,250
(Requirement 1 only)
Crackling Fried Chicken bought equipment on January 2, 2016, for $21,000. The equipment
was expected to remain in service for four years and to perform 3,600 fry jobs. At the end of
the equipment's useful life, Crackling's estimates that its residual value will be $3,000. The
equipment performed 360 jobs the first year, 1,080 the second year, 1,440 the third, and 720
the fourth year.
Requirements
1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per
year for the equipment under the three depreciation methods. Show your computations.
Note: Three depreciation schedules must be prepared.
2. Which method tracks the wear and tear on the equipment most closely?
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Sale of Equipment
Equipment was acquired at the beginning of the year at a cost of $612,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $44,360.
a. What was the depreciation for the first year? Round your answer to the nearest cent.
b. Using the rounded amount from Part a in your computation, determine the gain(loss) on the sale of the equipment, assuming it was sold at the end of year eight for $102,987.
Round your answer to the nearest cent and enter as a positive amount.
c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.
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E9-20 Computing depreciation-three methods
Learning Objective 2
1. Double-declining-balance, 12/31/19, Exp. $8,250
Crispy Fried Chicken bought equipment on January 2, 2018, for $33,000. The
equipment was expected to remain in service for four years and to operate for
6,750 hours. At the end of the equipment's useful life, Crispy's estimates that its
residual value will be $6,000. The equipment operated for 675 hours the first
year, 2,025 hours the second year, 2,700 hours the third year, and 1,350 hours the
fourth year.
Requirements
1. Prepare a schedule of depreciation expense, accumulated depreciation,
and book value per year for the equipment under the three depreciation
methods: straight-line, units-of-production, and double-declining-balance.
Show your computations. Note: Three depreciation schedules must be
prepared.
2. Which method tracks the wear and tear on the equipment most closely?
Chapter 10 Solutions
Horngren's Accounting (12th Edition)
Ch. 10 - Prob. 1QCCh. 10 - Prob. 2QCCh. 10 - Which method almost always produces the most...Ch. 10 - A Celty Airline jet costs $28,000,000 and expected...Ch. 10 - Prob. 5QCCh. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Prob. 8QCCh. 10 - Prob. 9QCCh. 10 - Prob. 10AQC
Ch. 10 - Prob. 1RQCh. 10 - Plant assets are recorded at historical cost. What...Ch. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - What is depreciation? Define useful life, residual...Ch. 10 - Which depreciation method ignores residual value...Ch. 10 - How does a business decide which depreciation...Ch. 10 - What is the depreciation method that is used for a...Ch. 10 - If a business changes the estimated useful life or...Ch. 10 - Prob. 12RQCh. 10 - How is discarding of a plant asset different from...Ch. 10 - How is gain or loss determined when disposing of...Ch. 10 - Prob. 15RQCh. 10 - Prob. 16RQCh. 10 - Prob. 17RQCh. 10 - Prob. 18RQCh. 10 - Prob. 19RQCh. 10 - What does it mean if an exchange of plant assets...Ch. 10 - Determining the cost of an asset Learning...Ch. 10 - Making a lump-sum asset purchase Learning...Ch. 10 - Prob. S10.3SECh. 10 - Prob. S10.4SECh. 10 - Prob. S10.5SECh. 10 - Prob. S10.6SECh. 10 - Prob. S10.7SECh. 10 - Prob. S10.8SECh. 10 - Prob. S10.9SECh. 10 - Prob. S10.10SECh. 10 - Prob. S10.11SECh. 10 - Prob. S10.12SECh. 10 - Prob. S10.13SECh. 10 - Prob. S10.14SECh. 10 - Prob. S10A.15SECh. 10 - Prob. S10A.16SECh. 10 - Prob. E10.17ECh. 10 - Making a lump-sum purchase of assets Learning...Ch. 10 - Prob. E10.19ECh. 10 - Computing depreciationthree methods Learning...Ch. 10 - Prob. E10.21ECh. 10 - Prob. E10.22ECh. 10 - E10-23 Recoding partial-year depreciation and sale...Ch. 10 - Prob. E10.24ECh. 10 - Prob. E10.25ECh. 10 - Measuring and recording goodwill Learning...Ch. 10 - Computing asset turnover ratio Learning Objective...Ch. 10 - Prob. E10.28AECh. 10 - Prob. E10.29AECh. 10 - Determining asset cost and recoding partial-year...Ch. 10 - Determining asset cost, preparing depreciation...Ch. 10 - Prob. P10.32APGACh. 10 - Prob. P10.33APGACh. 10 - Prob. P10.34APGACh. 10 - Prob. P10A.35APGACh. 10 - Determining asset cost and recording partial-year...Ch. 10 - Prob. P10.37BPGBCh. 10 - P10-38B Recording lump-sum asset purchases,...Ch. 10 - Prob. P10.39BPGBCh. 10 - Prob. P10.40BPGBCh. 10 - Prob. P10A.41BPGBCh. 10 - P10-42 Using Excel to prepare depreciation...Ch. 10 - Prob. P10.43CPCh. 10 - Comprehensive Problem for Chapters 8, 9, and 10...Ch. 10 - Comprehensive Problem for Chapters 8, 9, and 10...Ch. 10 - Prob. 3CPCh. 10 - Prob. 4CPCh. 10 - Prob. 5CPCh. 10 - Prob. 6CPCh. 10 - Prob. 7CPCh. 10 - Prob. 8CPCh. 10 - McDonald’s Corporation is the world’s leading...Ch. 10 - Prob. 10.1EICh. 10 - Prob. 10.1FCCh. 10 - Prob. 10.1FSC
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