Required information[The following information applies to the questions displayed below.]Tory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. Byusing the equipment in its operations for five years, the company expects to earn $90,300 annually, afterdeducting all expenses except depreciation.Calculate annual depreciation expense using double-declining-balance method.Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the totalfive-year period, assuming double-declining-balance depreciation is used.Complete this question by entering your answers in the tabs below.DepreciationScheduleCalculate annual depreciation expenses using double-declining-balance method.Note: Round Annual Depreciation to the nearest whole dollar.YearIncomeComputationYear 1Depreciation for the PeriodBeginning ofPeriod BookValueO8Depreciation AnnualRate9Depreciation< PrevnoEnd of PeriodAccumulatedDepreciationS8of 10Book ValueNext >*prt scdelete

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Description: Required information[The following information applies to the questions displayed below.]Tory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. Byusing the equipment in its operations for five years,

Double Declining Rate = (100% /no of years)*2 =100%/5 years *2 =40% The annual depreciation in the…

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mation applies to the questions displayed below.] s $256,400 for equipment that will last five years and have a $45,400 salvage t in its operations for five years, the company expects to earn $90,300 annually ses except depreciation. tion expense using double-declining-balance method.

mation applies to the questions displayed below.] s $256,400 for equipment that will last five years and have a $45,400 salvage t in its operations for five years, the company expects to earn $90,300 annually ses except depreciation. tion expense using double-declining-balance method.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 15PB: Urquhart Global purchases a building to house its administrative offices for $500,000. The best...

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Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
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.
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
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Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
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Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.