Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 4, Problem 4.6.3AAP
To determine
Concept Introduction:
Journal entries are the part of basic accounting or primary accounting. In journal entries there are two aspects one is debit and another is credit. These two aspects are always equal. Journal entries are based on the ledger and
To Prepare:
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Calculating partial-year depreciation
On February 28, 2017, Rural Tech Support purchased a copy machine for $53,400. Rural Tech Support expects the machine to last for six years and have a residual value of $3,000. Compute depreciation expense on the machine for the year ended December 31, 2017, using the straight-line method.
Depreciating a fixed asset
During 2018, Starbucks purchased fixed assets costing approximately $1.8 billion. Assume that the company purchased the assets at the beginning of the year, uses straight-line depreciation, and normally depreciates its equipment over four years. Assume a zero salvage value.
Compute the book value of the equipment at the end of each of the four years.
Complete a chart like the following.
2018
2019
2020
2021
Total
Depreciation expense (in millions)
Cash outflow associated with the purchase of the equipment (in millions)
What is the purpose of the adjustments at the end of each period?
Prepare journal entries to record depreciation of the printing machine for each of the years ended 30 june 2017 and 30 june 2018 using straight line method,declining balance method @40%, sum of digits method and production basis.State the carrying amount of the machine at the end of each period and prepare the journal entry to record the sale of machine on 01/07/2018
Chapter 4 Solutions
Using Financial Accounting Information
Ch. 4 - Revenue Recognition The highway department...Ch. 4 - Prob. 4.2.1ECh. 4 - Prob. 4.2.2ECh. 4 - Prob. 4.2.3ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6.1ECh. 4 - Prob. 4.6.2ECh. 4 - Prob. 4.6.3E
Ch. 4 - Prob. 4.6.4ECh. 4 - Prob. 4.7.1ECh. 4 - Prob. 4.7.2ECh. 4 - Prob. 4.8.1ECh. 4 - Prob. 4.8.2ECh. 4 - Prob. 4.8.3ECh. 4 - Prob. 4.8.4ECh. 4 - Prob. 4.8.5ECh. 4 - Prob. 4.9.1ECh. 4 - Working Backward: Depreciation Polk Corp....Ch. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.12.1ECh. 4 - Prob. 4.12.2ECh. 4 - Prob. 4.12.3ECh. 4 - Prob. 4.13.1ECh. 4 - Prob. 4.13.2ECh. 4 - Prob. 4.13.3ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15.1ECh. 4 - Prob. 4.15.2ECh. 4 - Prob. 4.15.3ECh. 4 - Prob. 4.15.4ECh. 4 - Prob. 4.15.5ECh. 4 - Prob. 4.16.1ECh. 4 - Prob. 4.16.2ECh. 4 - Prob. 4.16.3ECh. 4 - Prob. 4.17.1ECh. 4 - Prob. 4.17.2ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.19.1ECh. 4 - Prob. 4.19.2ECh. 4 - Prob. 4.20.1ECh. 4 - Prob. 4.20.2ECh. 4 - Prob. 4.20.3ECh. 4 - Prob. 4.21.1ECh. 4 - Prob. 4.21.2ECh. 4 - Prob. 4.22ECh. 4 - The Effect of Ignoring Adjustments on Net Income...Ch. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26.1MCECh. 4 - Prob. 4.26.2MCECh. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Prob. 4.28.1MCECh. 4 - Prob. 4.28.2MCECh. 4 - Prob. 4.1.1PCh. 4 - Prob. 4.1.2PCh. 4 - Prob. 4.2.1PCh. 4 - Prob. 4.2.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4.1PCh. 4 - Prob. 4.4.2PCh. 4 - Prob. 4.5.1PCh. 4 - Prob. 4.5.2PCh. 4 - Prob. 4.5.3PCh. 4 - Prob. 4.6.1PCh. 4 - Prob. 4.6.2PCh. 4 - Prob. 4.6.3PCh. 4 - Prob. 4.6.4PCh. 4 - Prob. 4.6.5PCh. 4 - Prob. 4.6.6PCh. 4 - Prob. 4.7.1PCh. 4 - Prob. 4.7.2PCh. 4 - Prob. 4.8MCPCh. 4 - Prob. 4.9.1MCPCh. 4 - Prob. 4.9.2MCPCh. 4 - Monthly Transactions, Adjustments, and Financial...Ch. 4 - Prob. 4.9.4MCPCh. 4 - Prob. 4.9.5MCPCh. 4 - Prob. 4.1.1AAPCh. 4 - Prob. 4.1.2AAPCh. 4 - Prob. 4.2.1AAPCh. 4 - Prob. 4.2.2AAPCh. 4 - Prob. 4.3AAPCh. 4 - Use of Account Balances as a Basis for Annual...Ch. 4 - Prob. 4.4.2AAPCh. 4 - Prob. 4.5.1AAPCh. 4 - Prob. 4.5.2AAPCh. 4 - Prob. 4.6.1AAPCh. 4 - Prob. 4.6.2AAPCh. 4 - Prob. 4.6.3AAPCh. 4 - Prob. 4.6.4AAPCh. 4 - Prob. 4.6.5AAPCh. 4 - Prob. 4.6.6AAPCh. 4 - Prob. 4.7.1AAPCh. 4 - Prob. 4.7.2AAPCh. 4 - Prob. 4.8AAMCPCh. 4 - Prob. 4.9.1AAMCPCh. 4 - Prob. 4.9.2AAMCPCh. 4 - Prob. 4.9.3AAMCPCh. 4 - Prob. 4.9.4AAMCP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- (Change in Estimate and Error Correction) Holtzman Company is in the process of preparing its financial statements for 2017. Assume that no entries for depreciation have been recorded in 2017. The followinginformation related to depreciation of fixed assets is provided to you.1. Holtzman purchased equipment on January 2, 2014, for $85,000. At that time, the equipment had an estimated useful life of 10 years with a $5,000 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2017, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000 salvage value.2. During 2017, Holtzman changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $300,000. It had a useful life of 10 years and a salvage value of $30,000. The following computations present depreciation on both bases for 2015 and 2016. 2016 2015 Straight-line…arrow_forwardDepreciation for Partial Periods Malone Delivery Company purchased a new delivery truck for $43,800 on April 1, 2016. The truck is expected to have a service life of 10 years or 159,600 miles and a residual value of $5,760. The truck was driven 9,200 miles in 2016 and 12,000 miles in 2017. Malone computes depreciation to the nearest whole month. Required: Compute depreciation expense for 2016 and 2017 using theFor interim computations, carry amounts out to two decimal places. Round your final answers to the nearest dollar.Straight-line method2016 $ 2,8532017 $ 3,804Sum-of-the-years'-digits method2016 ?????2017 $ 6,398Double-declining-balance method2016 $ 6,5702017 $ 7,446Activity method2016 $ 2,2082017 $ 2,880For each method, what is the book value of the machine at the end of 2016? At the end of 2017?(Round your answers to the nearest dollar.)Straight-line method2016 $ 40,9472017 $ 37,143Sum-of-the-years'-digits method2016 ??????2017 ??????Double-declining-balance method2016 $…arrow_forwardRecording Errors and Changes in Accounting Estimates On January 1, 2018, Zale Company purchased a building for $560,000. The building was estimated to have a useful life of 30 years and no residual value and was depreciated using the straight-line method. In 2020, the company revised the estimated total useful life to 25 years and adjusted the residual to $7,000. In addition, in 2020, the company discovered that building improvements of $8,400 made in early 2019 were incorrectly expensed as repair expense. Disregard income tax considerations. a. Provide the journal entry to record the adjustment for the error discovered in 2020. Assume that the error is material to the company. b. Provide the journal entry in 2020 to record depreciation expense. Note: Round your final answer to the nearest whole dollar. For example, enter 502 for 502.4 and enter 503 for 502.5.Note: Record your credit accounts in alphabetical order using the first letter of the account name. Date Account Name Dr.…arrow_forward
- A machine costing $145,800 is purchased on May 1, 2016. The machine is expected to be obsolete after three years (36 months) and thereafter, no longer useful to the company. The estimated salvage value is $54,00. Compute depreciation expenses for both 2016 and 2017 under each of the following depreciation methods: a. Straight line 2016 & 2017b. Double declining balance 2016 & 2017arrow_forwardOn August 31, 2018, Option Landscapes discarded equipment that had a cost of $16,500. Accumulated Depreciation as of December 31, 2017, was $15,000. Assume annual depreciation on the equipment is $1,500. Journalize the partial-year depreciation expense and disposal of the equipment. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)arrow_forwardRevision of Depreciation On January 2, 2015, Moser, Inc., purchased equipment for $100,000. The equipment was expected to have a $10,000 salvage value at the end of its estimated six-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2019, Moser decided that the useful life of the equipment should be extended by three years and the salvage value decreased to $8,000. a. Prepare a journal entry to record depreciation expense on the equipment for 2019. Round your answer to the nearest dollar. General Journal Debit Credit Dec. 31 AnswerDepreciation Expense - EquipmentAccumulated Depreciation - EquipmentEquipment Answer Answer AnswerDepreciation Expense - EquipmentAccumulated Depreciation - EquipmentEquipment Answer Answer To record depreciation expense. b. What is the book value of the equipment at the end of 2019 (after recording the depreciation expense for 2019)? Book Value at year ended…arrow_forward
- Problem 3XYZ Company purchases a machine On January 1, 2014 for $100,000 with an estimated residual value of $10,000 and useful life of four years. Use the double-declining balance method.1. Prepare the journal entry to record depreciation for 2016.2. If possible, compute the net book value at the end of 2016.3. Determine the amount of depreciation expense in 2017.arrow_forwardA company uses straight-line depreciation (round to the nearest whole month) and adjusts its accounts annually on 31 December. On 1 January 2016, A purchased a van for $450,000 which has an estimated useful life of 9 years and no residual value. On 1 January 2021, the company incurred the following expenditure on the van: (i) $1,500 for annual maintenance and servicing (ii) $60,000 to upgrade the van with a new and more powerful engine (iii) $1,000 to paint the van after 5 years of use. On 1 January 2021, the useful life of the van was revised to 13 years with a residual value of $15,000. Required: (a) What is the book value of the van as at 31 December 2020? (b) Journalize annual depreciation of the van on 31 December 2021. Show workings.arrow_forwardXYZ Company purchases a machine On January 1, 2014 for $100,000 with an estimated residual value of $10,000 and useful life of four years. Use the double-declining balance method.1. Prepare the journal entry to record depreciation for 2016.2. If possible, compute the net book value at the end of 2016.3. Determine the amount of depreciation expense in 2017.arrow_forward
- Bridgeport Company is in the process of preparing its financial statements for 2020. Assume that no entries for depreciation have been recorded in 2020. The following information related to depreciation of fixed assets is provided to you. 1. 2. 3. (a) Straight-line Declining-balance 48,000 Bridgeport purchased equipment on January 2, 2017, for $79,400. At that time, the equipment had an estimated useful life of 10 years with a $5,400 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2020, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,900 salvage value. 1. During 2020, Bridgeport changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $300,000. It had a useful life of 10 years and a salvage value of $30,000. The following computations present depreciation on both bases for 2018 and 2019. 2. 2019 3.…arrow_forwardCurrent Attempt in Progress On July 1, 2014, Sheridan Enterprises sold equipment with an original cost of $79,000 for $30,600. The equipment was purchased January 1, 2011, and was depreciated using the straight-line method over a five-year useful life with a $8,400 salvage value. Prepare the journal entry to record the sale of the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Account Titles and Explanation Cash Accumulated Depreciation-Equipment Equipment gain on Debit Credit IHIarrow_forwardRevision of Depreciation On January 2, 2012, Mosler, Inc., purchased equipment for $85,000. The equipment was expected to have a $10,000 salvage value at the end of its estimated six-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2016, Mosler decided that the useful life of the equipment should be extended by three years and the salvage value decreased to $8,000. a. Prepare a journal entry to record depreciation expense on the equipment for 2016. Round your answer to the nearest dollar. Dec. 31 General Journal Debit To record depreciation expense. 0 Credit 0 0 0 b. What is the book value of the equipment at the end of 2016 (after recording the depreciation expense for 2016)? Book Value at year ended December 31, 2016: $ 0arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY