College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 5A, Problem 3SEA
To determine
Prepare a depreciation schedule showing the depreciation expense,
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Compute the first-year depreciation using the straight-line method.
Straight-Line Depresiation
Annual Depreciation
Expense
Choose Numerator:
Choose Denominator:.
| Depreciation expense
Under what depreciation method(s) is an asset’s bookvalue used to calculate depreciation each year?a. Straight-line methodb. Units-of-production methodc. Declining-balance methodd. Weighted-average-cost method
Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciationmethods: straight-line,units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared.
Begin by preparing a depreciation schedule using thestraight-line method.
Straight-Line Depreciation Schedule
Depreciation for the Year
Asset
Depreciable
Useful
Depreciation
Accumulated
Book
Date
Cost
Cost
Life
Expense
Depreciation
Value
1-2-2024
$30,000
$30,000
12-31-2024
$24,000
÷
4 years
=
$6,000
$6,000
24,000
12-31-2025
24,000
÷
4 years
=
6,000
12,000
18,000
12-31-2026
24,000
÷
4 years
=
6,000
18,000
12,000
12-31-2027
24,000
÷
4 years
=
6,000
24,000
6,000
Before calculating the units-of-production depreciationschedule, calculate the…
Chapter 5A Solutions
College Accounting, Chapters 1-27
Ch. 5A - List three depreciation methods used for financial...Ch. 5A - Which depreciation method is used for tax...Ch. 5A - STRAIGHT-LINE DEPRECIATION A small deliver truck...Ch. 5A - SUM-OF-THE-YEARS'-DIGITS DEPRECIATION Using the...Ch. 5A - Prob. 3SEACh. 5A - MODIFIED ACCELERATED COST RECOVERY SYSTEM Using...Ch. 5A - STRAIGHT-LINE DEPRECIATION A computer was...Ch. 5A - Prob. 2SEBCh. 5A - DOUBLE-DECLININGBALANCE DEPRECIATION Using the...Ch. 5A - MODIFIED ACCELERATED COST RECOVERY SYSTEM Using...
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- Using the information from EA7, calculate depreciation using the straight-line method.arrow_forwardDetermine the machine's second-year depreciation and year end book value under the straight-line method. Straight-Line Depreciation Choose Numerator: / Choose Denominator: = Annual Depreciation Expense = Depreciation expense Year 2 Depreciation nces Year end book value (Year 2) =arrow_forwardFollowing the depreciation example on page 7-7 of the VLN determine Activity based year 2 accumulated depreciation_______arrow_forward
- Contrast the effects of the three depreciation methods on (1) depreciation expense, (2) net income, (3) accumulated depreciation, and (4) carrying amount in each of the following: (a) the early years of an asset's life, and (b) over the total life of the asset. ac7031dcd9e03....pdf (1) Depreciation Expense Same each year Varies with number of units produced Decreases each year Type here to search All three result in the same total depreciation expense 2aac7031dcd9e03....pdf Bi (2) Net Income Constant charge (depreciation expense) to income Impact on income will vary with the number of units produced Increasing income each year because depreciation expense is lower each year All three result in the same total impact on net income 22°C Sunnyarrow_forwardMake a schedule for all the examples for the following Depreciation Method through excel: a. Straight Line Method b. Sinking Fund Method c. Matheson’s Formula (2 problems) d. Double Declining Balance Method e. Sum of the Years Digit Methodarrow_forwardFollowing the depreciation example on page 7-7 of the VLN determine Activity based year 2 accumulated depreciation______ High light answearrow_forward
- Obj. 2 PR 9-2A Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3. Instructions 1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining- balance method. Also determine the total depreciation expense for the three years by each (Continued)arrow_forward6. Describe how to apply Straight-Line Depreciation, Declining Balance Depreciation, Double Declining Balance Depreciation, and Sum-of-the-Years' Digits Depreciation methods and include examples of calculations and journal entries used for each method.arrow_forwardPlease help find depreciation expense for the first full year using the straight line methodarrow_forward
- Sullivan Ranch Corporation has purchased a new tractor. The following information is given: $150,000 $10,000 Cost: Estimated Residual: Estimated Life in years: Estimated Life in hours: Actual Hours: Year 1 Year 2 Year 3 Year 4 4 1200 Required: 1. Prepare the following Straight-Line depreciation schedule by using the Excel SLN function to calculate Depreciation Expense and entering formulas for the remaining cells. Use absolute cell references when appropriate. (Use cells A4 to B12 from the given information to complete this question.) Year 1 2 360 270 350 220 3 4 Total Depreciation Schedule-Straight-Line Method End of year amounts Depreciatio Depreciatio n Expense n SULLIVAN RANCH CORPORATION Book Valuearrow_forwardWhich of the following depreciation methods applies a uniform depreciation rate each period to an asset's carrying amount? a.Straight-lineb.Declining-balancec.Sum-of-the-years'-digitsd.Units-of-productionarrow_forwardCharacteristics of Depreciation Methods Below is a common list of depreciation methods and characteristics related to depreciation. Depreciation Methods a. Straight-line depreciation method b. Declining balance depreciation method c. Units-of-production depreciation method when actual units produced increases over the life of the asset Characteristics 1. Results in depreciation expense that decreases over the life of the asset. 2. Results in depreciation expense that increases over the life of the asset. 3. Allocates the same amount of cost to each period of a depreciable assets life. 4. Calculated by multiplying a constant depreciation rate by depreciable cost. 5. Calculated by applying a constant depreciation rate to the assets book value at the beginning of the period. 6. Results in lowest income taxes in early years of the assets life. 7. Consistent with the matching principle. Required: Match one or more of the depreciation methods with each characteristic.arrow_forward
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