Question

1) Depreciation computed under double−declining−balance will decrease each year because: A.the book value used in the...

1) Depreciation computed under double−declining−balance will decrease each year because:
A.the book value used in the computation each year increases
B.the rate used in the computation each year decreases
C.the book value used in the computation each year decreases
D.the rate used in the computation each year increases

2) At the end of an asset's useful life, the balance in Accumulated Depreciation will:

A.be greater under units−of−production depreciation than under straight-line depreciation

B. be a greater amount under straight-line depreciation than under double−declining−balance depreciation

C.be the same amount under all the depreciation methods

D.be a lesser amount under double−declining−balance depreciation than under units−of−production depreciation

3)On January 2, 2016, McNally's Extra Corporation acquired equipment for $120,000. The estimated life of the equipment is 5 years or 20,000 hours. The estimated residual value is $20,000. What is the balance in Accumulated Depreciation on December 31, 2017, if McNally's Extra Corporation uses the double−declining−balance method of depreciation?
A.$43,200
B.$76,800
C.$23,200
D.$36,000

4) Rhoundakona Corporation bought property, plant, and equipment on January 1, 2014, at a cost of $35,000. Estimated residual value is $5,000 and the estimated useful life is 8 years. The company uses straight−line
depreciation. On January 1, 2017, Rhoundakona's management sells the asset for $25,000. The gain or loss on disposal is:

A.$10,000 loss
B.$1,250 gain
C.$1,250 loss
D.$25,000 gain

Homework Answers

Answer #1
1
Depreciation computed under double−declining−balance decreases because the book value used in the computation each year decreases
Option C is correct
2
At the end of an asset's useful life, the balance in Accumulated Depreciation will be the same amount under all the depreciation methods
Option C is correct
3
Double−declining−balance rate = 2*(1/5) = 40%
Depreciation for 2016 = 120000*40%= $30000
Depreciation for 2017 = (120000-30000)*40%= $36000
Balance in Accumulated Depreciation on December 31, 2017 = 30000+36000 = $36000
Option D is correct
4
Accumulated depreciation for 3 years = (35000-5000)*3/8= $11250
Book value on January 1, 2017 = 35000-11250= $23750
Gain on sale = 25000-23750 = $1,250 gain
Option B is correct
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Double-Declining-Balance Depreciation A building acquired at the beginning of the year at a cost of $76,400...
Double-Declining-Balance Depreciation A building acquired at the beginning of the year at a cost of $76,400 has an estimated residual value of $3,100 and an estimated useful life of four years. Determine the following. (a) The double-declining-balance rate % (b) The double-declining-balance depreciation for the first year $
Pina, Inc. changed depreciation methods in 2017 from straight-line to double-declining-balance. Depreciation prior to 2017 under...
Pina, Inc. changed depreciation methods in 2017 from straight-line to double-declining-balance. Depreciation prior to 2017 under straight-line was $101,000, whereas double-declining-balance depreciation prior to 2017 would have been $153,400. Pina’s depreciable assets had a cost of $383,500 with a $30,000 salvage value, and a 5-year remaining useful life at the beginning of 2017. Prepare the 2017 journal entries, if any, related to Pina’s depreciable assets.
The book value of an asset when using double-declining-balance depreciation is always greater than the book...
The book value of an asset when using double-declining-balance depreciation is always greater than the book value from using straight-line depreciation, except at the beginning and the end of the asset's useful life, when it is the same. TRUE OR FALSE?
Computing Straight-Line and Double-Declining-Balance Depreciation On January 2, 2016, Fischer Company purchases a machine that manufactures...
Computing Straight-Line and Double-Declining-Balance Depreciation On January 2, 2016, Fischer Company purchases a machine that manufactures a part for one of its key products. The machine cost $264,600 and is estimated to have a useful life of six years, with an expected salvage value of $22,500. Compute depreciation expense for 2016 and 2017 for the following depreciation methods. a. Straight-line. b. Double-declining balance. 2016 2017 Straight-line $Answer $Answer Double-declining Answer Answer
What is the depreciation in year three using Double Declining Balance switching to Straight Line for...
What is the depreciation in year three using Double Declining Balance switching to Straight Line for the following. The equipment has an initial cost of $350,000, delivery charges of $10,000 and installation costs of $5,000. The ongoing maintenance cost will be $4,000/year. The equipment will have an 8 year life and a salvage value of $50,000.
Double Declining Balance Method -- Commercial Lawn Mower: Acquired January 1. Purchased for $14,000; salvage value...
Double Declining Balance Method -- Commercial Lawn Mower: Acquired January 1. Purchased for $14,000; salvage value is $2,000. Useful life is 5 years. A. Is the salvage value used to compute book value (circle the answer)? Yes or No B. How is the double declining rate computed? C.Complete the following Double Declining Balance Table: Year Book Value: Start of Year DDB Percent Annual Depreciation Expense Accumulated Depreciation Book Value: End of Year Year 1 Year 2 Year 3 Year 4...
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...
Computing deprecitation under straight-line and double-declining-balance for partial years :- a machiene costign $145,800 is purchased...
Computing deprecitation under straight-line and double-declining-balance for partial years :- a machiene costign $145,800 is purchased on May 1,2016. The machiene is expected to be obsolete after three years (36 months) and, thereafter, no longer useful to the company. The estimated salvage value is $5,400. computre depreciation expense for both 2016 and 2017 under each of the following depreciation methods : 1) straight-line 2) double-declining-balance
A fixed asset with a five-year estimated useful life and no scrap value is sold at...
A fixed asset with a five-year estimated useful life and no scrap value is sold at the end of the second year of its useful life. How would using the straight-line method of depreciation instead of the double-declining balance method of depreciation affect a gain or loss on the sale of the plant asset? A gain would be greater or a loss would be less using straight-line depreciation. A gain would be less or a loss would be greater using...
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment...
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,430,000. Its useful life was estimated to be six years, with a $246,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight Line Declining Balance Difference 2018 $ 364 $ 810 $ 446...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Statistics Discussion: The accuracy of a forecasting technique is evaluated especially using the MSE (mean squared...
    asked 40 minutes ago
  • If the U.S. government manages to close a recessionary gap and achieve potential GDP with fiscal...
    asked 44 minutes ago
  • A block with mass 10kg is on a ramp angled at 20 degrees above the horizontal,...
    asked 44 minutes ago
  • I have a sample of 31 7thgrade girls who took an IQ test.  I calculated the sample...
    asked 52 minutes ago
  • A researcher wishes to estimate the proportion of adults who have​ high-speed Internet access. What size...
    asked 52 minutes ago
  • Brick column in the external corridor of a house, with section size of 440 mm X520...
    asked 53 minutes ago
  • 17.                             Mel has a(n) __________ lien on Ellen’s car after he replaced her clutch. The lien.
    asked 1 hour ago
  • Jackson Company engaged in the following investment transactions during the current year. Feb 17,Purchased  430 shares of...
    asked 1 hour ago
  • When might discrimination in the workplace be justified? Might discrimination on the basis of gender or...
    asked 1 hour ago
  • The strength grade of materials used for brick masonry at a certain site is as follows:...
    asked 1 hour ago
  • Show (prove), from the original definition of the integers, that subtraction of integers is well defined....
    asked 1 hour ago
  • How is polarity of a "bond" different than polarity of a "molecule?" What makes a particular...
    asked 1 hour ago