Question

Part 2: Utilizing Assets Sam’s Construction Inc. purchased an equipment truck on October 1, 2019. The...

Part 2: Utilizing Assets

Sam’s Construction Inc. purchased an equipment truck on October 1, 2019. The truck cost $31,000 plus $3,700 in taxes and $350 in destination/shipping charges. Sam’s Construction Inc. paid $10,000 in cash and signed a note for the remainder. The company’s accounting manager estimates the truck to have a five-year useful life and residual value of $6,850. Sam’s Construction Inc. uses the straight-line depreciation method.

  1. Which accounts will be affected by the accounting entry on October 1, 2019 to capitalize the truck? Note each account, if it increases or decreases, and the dollar amount.

  1. How much straight-line depreciation will be recorded for the year ended December 31, 2019 (rounded to the nearest dollar)? To which accounts will the depreciation be recorded and how will the 2019 financial statements be impacted?

  1. How much depreciation expense (related to the truck) will appear in Sam’s Construction Inc.’s income statement for the year ended December 31, 2020?

  1. What is the net book value of the truck that will appear in the company’s December 31, 2020 balance sheet?
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Revision of Depreciation On January 2, 2015, Moser, Inc., purchased equipment for $100,000. The equipment was...
Revision 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...
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its...
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its purchase, the equipment was estimated to have a useful life of five years and a salvage value of $100,000. The equipment was depreciated using the straight-line method of depreciation through 2021. At the beginning of 2022, the estimate of useful life was revised to a total life of seven years and the expected salvage value was changed to $42,500. The amount to be recorded...
1) Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $21,000 for the truck....
1) Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $21,000 for the truck. The truck is expected to have a $3,000 residual value and a 5-year life. Cambridge has a December 31 fiscal year end. Using the double-declining balance method, how much is the 2019 depreciation expense? (Enter only whole dollar values.) Hint: what is the year 2 depreciation amount? 2) Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $16,000 for the truck. The...
Charlie's Chocolate Company acquired a new truck at at cost of $52,000 on January 1, 2019....
Charlie's Chocolate Company acquired a new truck at at cost of $52,000 on January 1, 2019. The truck is expected to be used for 4 years and have a salvage value of $8,000 at that time. The company uses the straight-line method to calculate depreciation. #1. Calculate depreciation expense for 2019 #2 Calculate depreciation expense for 2020 #3 Calculate accumulated depreciation as of 12/31/2019 #4 Calculate accumulated depreciation as of 12/31/2020 #5 Calculate the book value as of 12/31/2020 (show...
Dan’s Desserts acquired six new ice cream freezers for their warehouse on April 1, 2019. The...
Dan’s Desserts acquired six new ice cream freezers for their warehouse on April 1, 2019. The freezers cost a total of $60,750 plus $2,500 in sales taxes, for which Dan’s Desserts issued a check. The company estimates the freezers will have a value of $11,000 when the company finishes using them in 5 years. Round to the nearest dollar. Which accounts will be affected by the accounting entry for the acquisition of the freezers on April 1, 2019? Calculate the...
What formula can I use for this question. Rose Bush Nursery purchased a delivery truck for...
What formula can I use for this question. Rose Bush Nursery purchased a delivery truck for $34,400. The truck is expected to have a useful life of 5 years and a residual value of $1,400. If the truck was purchased on June 1, 2019, what is the amount of depreciation expense for the truck for the year ended December 31, 2019? The company uses the straight-line method of depreciation.
Stacey Ltd purchased a new machine on 1 September 2019 at a cost of $251,200 (excluding...
Stacey Ltd purchased a new machine on 1 September 2019 at a cost of $251,200 (excluding GST).    The entity estimated that the machine has a residual value of $28,600 (excluding GST).    The machine is expected to be used for 42,000 working hours during its 10 year life Assume a 31 December year-end.       Required      (a) Calculate the depreciation expense using the straight-line method for 2019 and 2020. (b) Calculate the depreciation expense using the diminishing-balance method and a depreciation rate...
Stacey Ltd purchased a new machine on 1 September 2019 at a cost of $243,000 (excluding...
Stacey Ltd purchased a new machine on 1 September 2019 at a cost of $243,000 (excluding GST).    The entity estimated that the machine has a residual value of $28,800 (excluding GST). The machine is expected to be used for 42,000 working hours during its 10 year life Assume a 31 December year-end.    Required    (a) Calculate the depreciation expense using the straight-line method for 2019 and 2020. (b) Calculate the depreciation expense using the diminishing-balance method and a...
Exercise #3: Partial-Period Depreciation On May 1, 2019, Waters Company purchased equipment for $271,000. The estimated...
Exercise #3: Partial-Period Depreciation On May 1, 2019, Waters Company purchased equipment for $271,000. The estimated service life of the equipment is six years and the estimated residual value is $19,000. Waters’ fiscal year ends on December 31. Required: Calculate depreciation of the equipment for fiscal years 2019 and 2020, as well as the book value at December 31, 2020, using each method shown below. Round calculations to the nearest whole dollar. Straight-Line: Double-Declining Balance: Sum-of-the-Years’-Digits:
1. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $15,000 for the truck....
1. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $15,000 for the truck. The truck is expected to have a $2,500 residual value and a 5-year life. Cambridge has a December 31 fiscal year end. Using the double-declining balance method, how much is the 2019 depreciation expense? (Enter only whole dollar values.) Hint: what is the year 2 depreciation amount? 2. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $22,000 for the truck. The...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT