Question

On January 1, 2016, Sparks Company purchased for $360,000 snow-making equipment having an estimated useful life...

On January 1, 2016, Sparks Company purchased for $360,000 snow-making equipment having an estimated useful life of 8 years with an estimated salvage value of $25,000 and 500,000 units expected to be produced. Depreciation is taken for the portion of the year the asset is used.

(a) Complete the form below by determining the depreciation expense and year-end book values of 2015 and 2016 using the

1. Straight Line Method

2. Production assuming 50,000 units produced in 2016 and 60,000 in 2017.

3. Double-declining balance method.

Notes: Show all calculations and round to whole dollar when necessary.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1.

Particulars 2016 2017
Book Value $360000 $318125

Depreciation Expense

Straight line (Book value-Residual Value/No of years)

 $ 41875 $ 41875
Workings (360000-25000/8)
Year End Book Values $318125 $276250

2. Production Method

Particulars 2016 2017
Book Value 360000 324000
Depreciation(B.value/est. production*actual production)

36000

 43200
Working (360000/500000*50000) (360000/500000*60000)
year end b.value 324000 280800

3.Double declining method

Particulars 2016 2017
Book Value 360000 315000

Depreciation =

Book Value/Est years

 45000 39375
Working 360000/8 315000/8
Year End Book Value 315000 275625
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On July 1, 2020, Flint Company purchased for $3,960,000 snow-making equipment having an estimated useful life...
On July 1, 2020, Flint Company purchased for $3,960,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $165,000. Depreciation is taken for the portion of the year the asset is used. (a) Complete the form below by determining the depreciation expense and year-end book values for 2020 and 2021 using the 1. sum-of-the-years'-digits method. 2. double-declining balance method.
On July 1, 2020, Sarasota Company purchased for $5,760,000 snow-making equipment having an estimated useful life...
On July 1, 2020, Sarasota Company purchased for $5,760,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $240,000. Depreciation is taken for the portion of the year the asset is used. Assume the company had used straight-line depreciation during 2020 and 2021. During 2022, the company determined that the equipment would be useful to the company for only one more year beyond 2022. Salvage value is estimated at $320,000. Compute the amount...
On July 2, 2017, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful...
On July 2, 2017, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the form below by determining the depreciation expense/CCA and year-end book values/UCC for 2017 and 2018 using...
On January 2, 2013, Chow Corporation acquired a new machine with an estimated useful life of...
On January 2, 2013, Chow Corporation acquired a new machine with an estimated useful life of five years. The cost of the equipment was $60,000 with a residual value of $4,600. Chow adopts the cost model as its accounting policy in subsequently measuring its property, plant, and equipment.    a-1 Prepare a complete depreciation table under the straight-line method. Assume that a full year of depreciation was taken in 2013. (Omit the "$" sign in your response.)    Year Depreciation...
Leo Company purchased equipment on January 1, 2014 for $90,000. It is estimated that the equipment...
Leo Company purchased equipment on January 1, 2014 for $90,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life. Answer Questions below: 1. Compute the amount of depreciation expense for the year ended December 31, 2014, using the straight-line method of depreciation. 2. If 16,000 units of product are produced in 2014 and 24,000...
Torge Company bought a machine for $82,000 cash. The estimated useful life was five years and...
Torge Company bought a machine for $82,000 cash. The estimated useful life was five years and the estimated residual value was $7,000. Assume that the estimated useful life in productive units is 171,000. Units actually produced were 45,600 in year 1 and 51,300 in year 2. 1. Determine the appropriate amounts to complete the following schedule. Depreciation Expense for Book Value at the End of Method of Depreciation Year 1 Year 2 Year 1 Year 2 Straight-line Units-of-production Double-declining-balance 2-a....
Blue Spruce Corp. purchased equipment on January 1, 2021 for $162,000. It is estimated that the...
Blue Spruce Corp. purchased equipment on January 1, 2021 for $162,000. It is estimated that the equipment will have a $9,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 180,000 units over its 5-year life. Answer the following independent questions. Compute the amount of depreciation expense for the year ended December 31, 2021 using the straight-line method of depreciation. Straight-line method $enter the depreciation expense under the straight-line method...
1.Trouble Company purchased equipment on January 1, 2016, for $60,000. It is estimated that the equipment...
1.Trouble Company purchased equipment on January 1, 2016, for $60,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life. Compute depreciation expense for 2016 using the straight-line method of depreciation. 2. Adriane’s Grocery Store had a beginning inventory of $14,000 and an ending inventory of $19,000. Net sales during the year amounted to $78,000...
Case E. Matson Company purchased the following on January 1, 2016:      • Office equipment at...
Case E. Matson Company purchased the following on January 1, 2016:      • Office equipment at a cost of $42,000 with an estimated useful life to the company of three years and a residual value of $12,600. The company uses the double-declining-balance method of depreciation for the equipment. • Factory equipment at an invoice price of $806,800 plus shipping costs of $22,000. The equipment has an estimated useful life of 112,000 hours and no residual value. The company uses the...
Sheffield Corp. purchased equipment on January 1, 2021 for $139,500. It is estimated that the equipment...
Sheffield Corp. purchased equipment on January 1, 2021 for $139,500. It is estimated that the equipment will have a $7,750salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 155,000 units over its 5-year life. Answer the following independent questions. Compute the amount of depreciation expense for the year ended December 31, 2021 using the straight-line method of depreciation. Straight-line method $enter the depreciation expense under the straight-line method for the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT