OnJanuary 3,2020,GagneInc. paid $320,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of$2,500,$6,400sales tax, and $21,100 for special installation. Management estimates that the computer will remain in service for five years and have a residual value of $20,000. The computer will process 50,000 documents the first year, decreasing annually by 5,000 during each of the next four years (that is 45,000 documents in 2021,40,000 documents is 2022, and so on). In trying to decide which depreciation method to use, the company president has requested a depreciation schedule for each of three depreciation methods (straight-line, units-of-production, and double-diminishing-balance). 1.Before completing the straight-line depreciation schedule, calculate the straight-line depreciation rate. First, select the labels for the formula and then compute the rate. (Round the rate to two decimal places.) 2. Complete the Straight-Line Depreciation Schedule. Begin by filling out the schedule through 2021, and then complete the schedule by entering the amounts through 2024. (Enter the rate to two decimal places. Round all other amounts to the nearest whole dollar.) 3. Before completing the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the labels for the formula and then compute the rate. (Round the unit rate to the nearest cent.) 4.Complete the Units-of-Production Depreciation Schedule. Begin by filling out the schedule through 2021, and then complete the schedule by entering the amounts through 2024. (Enter depreciation per unit to the nearest cent. Round all other amounts to the nearest whole dollar.) 5.Before completing the double-diminishing-balance schedule, calculate the double-diminishing-balance rate. Select the labels for the formula and then compute the rate. (Round the rate to two decimal places.) 6.Complete the Double-Diminishing-Balance Depreciation Schedule. Begin by filling out the schedule through 2021,and then complete the schedule by entering the amounts through 2024. (Enter the rate to two decimal places. Round all other amounts to the nearest whole dollar.)
OnJanuary 3,2020,GagneInc. paid $320,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of$2,500,$6,400sales tax, and $21,100 for special installation. Management estimates that the computer will remain in service for five years and have a residual value of $20,000. The computer will process 50,000 documents the first year, decreasing annually by 5,000 during each of the next four years (that is 45,000 documents in 2021,40,000 documents is 2022, and so on). In trying to decide which depreciation method to use, the company president has requested a depreciation schedule for each of three depreciation methods (straight-line, units-of-production, and double-diminishing-balance). 1.Before completing the straight-line depreciation schedule, calculate the straight-line depreciation rate. First, select the labels for the formula and then compute the rate. (Round the rate to two decimal places.) 2. Complete the Straight-Line Depreciation Schedule. Begin by filling out the schedule through 2021, and then complete the schedule by entering the amounts through 2024. (Enter the rate to two decimal places. Round all other amounts to the nearest whole dollar.) 3. Before completing the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the labels for the formula and then compute the rate. (Round the unit rate to the nearest cent.) 4.Complete the Units-of-Production Depreciation Schedule. Begin by filling out the schedule through 2021, and then complete the schedule by entering the amounts through 2024. (Enter depreciation per unit to the nearest cent. Round all other amounts to the nearest whole dollar.) 5.Before completing the double-diminishing-balance schedule, calculate the double-diminishing-balance rate. Select the labels for the formula and then compute the rate. (Round the rate to two decimal places.) 6.Complete the Double-Diminishing-Balance Depreciation Schedule. Begin by filling out the schedule through 2021,and then complete the schedule by entering the amounts through 2024. (Enter the rate to two decimal places. Round all other amounts to the nearest whole dollar.)
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets: Acquisition, Use, Impairment, And Disposal
Section: Chapter Questions
Problem 52RSCQ
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OnJanuary 3,2020,GagneInc. paid $320,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of$2,500,$6,400sales tax, and $21,100 for special installation. Management estimates that the computer will remain in service for five years and have a residual value of $20,000.
The computer will process 50,000 documents the first year, decreasing annually by 5,000 during each of the next four years (that is 45,000 documents in 2021,40,000 documents is 2022, and so on). In trying to decide whichdepreciation method to use, the company president has requested a depreciation schedule for each of three depreciation methods (straight-line, units-of-production, and double-diminishing-balance).
The computer will process 50,000 documents the first year, decreasing annually by 5,000 during each of the next four years (that is 45,000 documents in 2021,40,000 documents is 2022, and so on). In trying to decide which
1.Before completing the straight-line depreciation schedule, calculate the straight-line depreciation rate. First, select the labels for the formula and then compute the rate. (Round the rate to two decimal places.)
2. Complete the Straight-Line Depreciation Schedule. Begin by filling out the schedule through 2021, and then complete the schedule by entering the amounts through 2024.
(Enter the rate to two decimal places. Round all other amounts to the nearest whole dollar.)
(Enter the rate to two decimal places. Round all other amounts to the nearest whole dollar.)
3. Before completing the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the labels for the formula and then compute the rate. (Round the unit rate to the nearest cent.)
4.Complete the Units-of-Production Depreciation Schedule. Begin by filling out the schedule through
2021, and then complete the schedule by entering the amounts through 2024.
(Enter depreciation per unit to the nearest cent. Round all other amounts to the nearest whole dollar.)5.Before completing the double-diminishing-balance schedule, calculate the double-diminishing-balance rate. Select the labels for the formula and then compute the rate. (Round the rate to two decimal places.)
6.Complete the Double-Diminishing-Balance Depreciation Schedule. Begin by filling out the schedule through
2021,and then complete the schedule by entering the amounts through 2024. (Enter the rate to two decimal places. Round all other amounts to the nearest whole dollar.)
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