Assume that Smith's Auto Sales paid $45,000 for equipment with a 15-year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will remain useful for only five more years. Read the requirements. Requirement 1. Record depreciation expense on the equipment for Year 7 by the straight-line method. First, select the formula to calculate the company's revised depreciation expense on the equipment for Year Then enter the amounts and calculate the depreciation for Year 7. (Enter "0" for items with a zero value.) Revised depreciation Record the depreciation on the equipment for Year 7. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Requirements 1. Record depreciation expense on the equipment for Year 7 by the straight-line method. 2. What accumulated depreciation at the end of Year 7? Print Done Requirement 2. What is accumulated depreciation at the end of Year 7? The accumulated depreciation at the end of Year 7 is

Assume that Smith's Auto Sales paid $45,000 for equipment with a 15-year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will remain useful for only five more years. Read the requirements. Requirement 1. Record depreciation expense on the equipment for Year 7 by the straight-line method. First, select the formula to calculate the company's revised depreciation expense on the equipment for Year Then enter the amounts and calculate the depreciation for Year 7. (Enter "0" for items with a zero value.) Revised depreciation Record the depreciation on the equipment for Year 7. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Requirements 1. Record depreciation expense on the equipment for Year 7 by the straight-line method. 2. What accumulated depreciation at the end of Year 7? Print Done Requirement 2. What is accumulated depreciation at the end of Year 7? The accumulated depreciation at the end of Year 7 is

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PA: Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and...

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A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.
Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
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On April 30, 2023, Foley Distribution Service purchased a copy machine for $53,400. Foley Distribution Service expects the machine to last for six years and to have a residual value of $3,000. Compute depreciation expense on the machine for the year ended December 31, 2023, using the straight-line method. Begin by selecting the formula to calculate the company's depreciation expense on the machine for the year ended December 31, 2023. Then enter the amounts and calculate the depreciation expense. (Abbreviation used: Acc. = accumulated. Do not round intermediary calculations. Only round the amount you input for straight-line depreciation to the nearest dollar.) Straight-line [( - ) ÷ ] × ( ÷ 12 ) = depreciation
Mace Company acquired equipment that cost $36,000, which will be depreciated on the assumption that the equipment will last six years and have a $2,400 residual value. Component parts are not significant and need not be recognized and depreciated separately. Several possible methods of depreciation are under consideration. Required:1. Prepare a schedule that shows annual depreciation expense for the first two years, assuming the following (Round your answer to nearest whole dollar.):a. Declining-balance method, using a rate of 30%.b. Productive-output method. Estimated output is a total of 210,000 units, of which 24,000 will be produced the first year; 36,000 in each of the next two years; 30,000 the fourth year; and 42,000 the fifth and sixth years.c. Straight-line method. 2. Repeat your calculations for requirement 1, assuming a useful life of 10 years, and a declining-balance rate of 20% that reflects the longer life, but the same number of units of production. The residual value is…