Question

Units of Activity - Commercial Lawn Mower: Acquired January 1. Purchased for $14,000 salvage value is...

Units of Activity - Commercial Lawn Mower: Acquired January 1. Purchased for $14,000 salvage value is $2,000. Useful life is 5 years, Total units of activity = 6,250 hours.

A. What is the depreciable cost amount?

B. Show your computation to calculate the depreciation rate per hour.

C. Will the depreciation rate change from year to year? Yes or No

D. Complete the following Units of Activity Depreciation table for the first five years they use the equipment:

Year Hours Used Deprecation Rate Per Hour Annual Depreciation Expense Accumulated Depreciation Balance Book Value
Year 1 950
Year 2 845
Year 3 1,250
Year 4 1,555
Year 5 1,650

E. What is the accumulated depreciation balance for the asset at the end of year 3?

F. What must the book value equal at the end of year 5?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A. Depreciable cost is the amount of cost the asset can be depreciated over time.

B. Calculation of depreciation rate per hour:

= (cost of asset - Salvage value of asset) / Life of asset in hour

= (14000-2000) / 6250

= $1.92 per hour

C. Yes, depreciation rate year will change from year to year.

D. Depreciation table:

E. Answer: $5846

F. Book value equal at the end of year 5 is zero.

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
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...
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...
Units-of-activity Depreciation A truck acquired at a cost of $530,000 has an estimated residual value of...
Units-of-activity Depreciation A truck acquired at a cost of $530,000 has an estimated residual value of $28,800, has an estimated useful life of 56,000 miles, and was driven 3,900 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $ (b) The depreciation rate $ per mile (c) The units-of-activity depreciation for the year $
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...
Question No. 2: ​(2+2 Marks) On January 1, 2019, Engro Corporation acquired equipment for PKR26,000. The...
Question No. 2: ​(2+2 Marks) On January 1, 2019, Engro Corporation acquired equipment for PKR26,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated residual value is PKR2,000. A) Prepare depreciation schedule for 3 years, if Engro Corporation uses unit-of-activity method of depreciation. Equipment used for 10,000 hours in Year 1, 15,000 hours in Year 2 and 5,000 hours in Year 3. Year Cost Depreciation Expense Accumulated Depreciation Book Value B) Prepare depreciation schedule for...
Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on...
Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of $131,000. Over its 4-year useful life, the bus is expected to be driven 236,000 miles. Salvage value is expected to be $7,100. Correct answer iconYour answer is correct. Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit $Type your answer here eTextbook and Media       Incorrect answer...
Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in...
Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $400,300 and the balance in Accumulated Depreciation—Trucks is $124,060. Details of the subsidiary ledger are as follows: Truck No. Cost Estimated Residual Value Estimated Useful Life Accumulated Depreciation at Beginning of Year Miles Operated During Year 1 $77,000 $11,550 220,000 miles —     33,000 miles 2 111,800 13,416 330,000 $22,360     33,000 3 99,000 13,860 212,000 $79,200     21,200 4 112,500 13,500 320,000 $22,500     38,400...
Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in...
Depreciation by units-of-activity MethodPrior to adjustment at the end of the year, the balance in Trucks is $404,700 and the balance in Accumulated Depreciation—Trucks is $121,940. Details of the subsidiary ledger are as follows:TruckNo.CostEstimatedResidualValueEstimatedUsefulLifeAccumulatedDepreciationat Beginningof YearMilesOperatedDuringYear1$80,000$12,000210,000miles—    31,500miles2117,20014,064300,000$23,440    30,000395,00013,300215,000$76,000    21,5004112,50013,500350,000$22,500    42,000a. Determine for each truck the depreciation rate per mile and the amount to be credited to the accumulated depreciation section of each subsidiary account for the miles operated during the current year. Keep in mind that the depreciation taken cannot reduce the book value...
Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in...
Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $405,200 and the balance in Accumulated Depreciation—Trucks is $119,340. Details of the subsidiary ledger are as follows: Truck No. Cost Estimated Residual Value Estimated Useful Life Accumulated Depreciation at Beginning of Year Miles Operated During Year 1 $81,500 $12,225 230,000 miles —     34,500 miles 2 112,700 13,524 290,000 $22,540     29,000 3 91,000 12,740 213,000 $72,800     21,300 4 120,000 14,400 270,000 $24,000     32,400...
Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in...
Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $416,400 and the balance in Accumulated Depreciation—Trucks is $123,980. Details of the subsidiary ledger are as follows: Truck No. Cost Estimated Residual Value Estimated Useful Life Accumulated Depreciation at Beginning of Year Miles Operated During Year 1 $83,000 $12,450 200,000 miles — 30,000 miles 2 115,400 13,848 410,000 $23,080 41,000 3 95,500 13,370 206,000 $76,400 20,600 4 122,500 14,700 410,000 $24,500 49,200...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT