Asset depreciation and disposition.
Answer each of the following questions. SHOW YOUR WORK.
1. A plant...
Asset depreciation and disposition.
Answer each of the following questions. SHOW YOUR WORK.
1. A plant asset purchased for $500,000 has an estimated life of 10
years and a residual value of $25,000. Depreciation for the
second year of use, determined by the declining-balance
method at twice the straight-line rate is $_____________.
2. A plant asset purchased for $440,000 at the beginning of the
year has an estimated life of 5 years and a residual value of
$40,000. Depreciation for...
Exercise 11-1 Depreciation methods [LO11-2]
On January 1, 2018, the Excel Delivery Company purchased a
delivery...
Exercise 11-1 Depreciation methods [LO11-2]
On January 1, 2018, the Excel Delivery Company purchased a
delivery van for $129,000. At the end of its five-year service
life, it is estimated that the van will be worth $13,200. During
the five-year period, the company expects to drive the van 386,000
miles.
Required:
Calculate annual depreciation for the five-year life of the van
using each of the following methods.
1. Straight line.
2. Sum-of-the-years’-digits.
3. Double-declining balance.
4. Units of production using...
Twilight Manufacturing's property, plant and equipment
records reveal the following information:
Equipment
Cost
Residual Value
Purchase...
Twilight Manufacturing's property, plant and equipment
records reveal the following information:
Equipment
Cost
Residual Value
Purchase Date
Depreciation Method
Estimated Useful Life
Units Produced in 2014
(1)
50,000
12,000
Dec1, 2013
Straight Line
5 years
2,000
(2)
60,000
8,000
Oct 18, 2014
Units of Production
50,000 units
5,000
(3)
120,000
none
June 12, 2014
Double Declining Balance
10 years
6,000
(4)
90,000
10,000
May 3, 2014
Straight Line
8 years
8,000
Calculate the depreciation expense for each equipment
item for...
Transactions for Fixed Assets, Including Sale
The following transactions and adjusting entries were completed
by Robinson...
Transactions for Fixed Assets, Including Sale
The following transactions and adjusting entries were completed
by Robinson Furniture Co. during a three-year period. All are
related to the use of delivery equipment. The
double-declining-balance method of depreciation is used.
Year 1
Jan. 8.
Purchased a used delivery truck for $61,440, paying cash.
Mar. 7.
Paid garage $230 for changing the oil, replacing the oil
filter, and tuning the engine on the delivery truck.
Dec. 31.
Recorded depreciation on the truck for...
Short Exercise 9-6
Disposal of Plant Assets: No Trade-In
Times Printing owned a piece of equipment...
Short Exercise 9-6
Disposal of Plant Assets: No Trade-In
Times Printing owned a piece of equipment that cost $32,400 and
on which it had recorded $18,000 of accumulated depreciation. The
company disposed of the equipment on January 2, the first day of
business of the current year.
1. Calculate the carrying value of the
equipment.
$
2. Calculate the gain or loss on the disposal
under each of the following assumptions: (If required, use the
minus sign to indicate a...
1. XYZ Corp. expects the following revenues, cash expenses, and
depreciation charges in the future:
Year...
1. XYZ Corp. expects the following revenues, cash expenses, and
depreciation charges in the future:
Year 1 2 3
Revenues $89,000 $106,000 $145,000
Cost of goods sold $38,000 $ 49,000 $53,000
Selling expenses $11,000 $ 13,000 $14,000
Interest expense $21,000 $ 23,000 $24,000
Interest revenue $7,000 $ 9,000 $11,000
Other cash operating expense$10,000 $ 11,000 $12,000
Depreciation $ 9,500 $ 13,500 $15,000
This business is in the 22 percent tax bracket. Please compute
the after-tax cash flows from operations for...
Nevertire Ltd purchased a delivery van costing $52,000. It is
expected to have a residual value...
Nevertire Ltd purchased a delivery van costing $52,000. It is
expected to have a residual value of $12,000 at the end of its
useful life of 4 years or 200,000 kilometres. Ignore GST.
Required:
Assume the van was purchased on 1 July 2019 and that the
accounting period ends on 30 June. Calculate the depreciation
expense for the second year using each of the
following depreciation methods
straight-line
diminishing balance (depreciation rate has been calculated as
31%)
units of production...
Corporation recently decided to dispose of a significant portion
of its plant assets. The assets to...
Corporation recently decided to dispose of a significant portion
of its plant assets. The assets to be held for disposal are
summarized here:
Description
Machinery
Equipment
cost
696,700
1,551,500
accumulated depreciation
(348,350)
(620,600)
Net Book Value at year end
348,350
930,900
Machinery is depreciated by the straight line method assuming a
6 year life with no scrap value. The asset was acquired 3 years
ago.
Equipment is depreciated by the straight line method, assuming
a 10 year life with no...
Below are 3 journal entries relating to Plant Assets.
(1) dr. Plant
Assets
9,000
Below are 3 journal entries relating to Plant Assets.
(1) dr. Plant
Assets
9,000
(2) dr. Cash
1,000
cr.
Cash
9,000
dr.
A/Depreciation
3,000
Record the purchase of assets with
cash
cr. Plant Asset
3,600
cr. Gain on
sale
400
(3) dr. Depreciation Expense
2,400
Record sale of Plant Asset for Cash
cr. Accum. Depreciation
2,400
Record depreciation
expense
Use these journal entries to post to the T accounts, Plant
Assets and...
You want to invest some amount of money at a 5% interest rate
that will yield...
You want to invest some amount of money at a 5% interest rate
that will yield three annual payments of $10,000 at the end of year
1, $10,000 at the end of year 2, and $10,000 at the end of year 3.
How much money do you need to invest today to generate these cash
flows. On the last day of the year, a piece of equipment was sold
for $34,000 cash. The equipment was purchased three years ago for...