Meman !Required Information[The following information applies to the questions displayed below]At the beginning of the year, Starr Systems bought a shed, a machine, and a trailer.The shed Initially cost $19,800 but had to be renovated at a cost of $440. The shed was expected to last 7 years, with aresidual value of $1,200 Repairs costing $260 were incurred at the end of the first year of useThe machine cost $11,000, and is estimated to have a total life of 40,000 hours and residual value of $900. The machinewas actually used 2.000 hours in year 1 and 4,000 hours in year 2The traller cost $10.800 and was expected to last 4 years, with a residual value of $2,000.2. Compute year 2 straight-line depreciation expense for the shed and prepare the journal entry to record it. If no entry is requirea transaction/event, select "No Journal Entry Required" In the first account fleld.)View transaction listJournal entry worksheetARecord the year 2 straight-line depreciation expense for the shed.Note: Enter debits before credits.Transaction1General JournalDebitCreditRecord entryClear entryView general journal

First, we compute the total costs to be capitalized to the shed. That would be the purchase cost…

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Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...

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Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.
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 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated five machines for $100,000 to improve efficiency in production of their remaining useful life of five years Low-cost repairs throughout the year totaled $70,000 Replaced a broken gear on a machine for $10,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
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.
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 the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
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.
Required information [The following information applies to the questions displayed below.] At the beginning of the year, Tangerine Incorporated bought a shed, a machine, and a trailer. The shed initially cost $21,500 but had to be renovated at a cost of $780. The shed was expected to last 7 years, with a residual value of $2,050. Repairs costing $600 were incurred at the end of the first year of use. The machine cost $11,850, and is estimated to have a total life of 40,000 hours and residual value of $900. The machine was actually used 2,000 hours in year 1 and 4,000 hours in year 2. The trailer cost $12,500 and was expected to last 4 years, with a residual value of $2,000. Required: 1. Compute the amount to be capitalized for the shed. Total cost
Required information. [The following information applies to the questions displayed below] University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 Hours Used 2,900 2 1,800 3 1,900 4 2,100 5 6 1,900 1,900 2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of Year Amounts Depreciation Year Expense 1 2 3 4 5 Accumulated Depreciation Book Value
! Required information [The following information applies to the questions displayed below.] Cheetah Copy purchased a new copy machine. The new machine cost $122,000 including installation. The company estimates the equipment will have a residual value of $30,500. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Hours Used 2,000 Year 1 2,000 2,000 3, 200 3 3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations.) CHEETAH CОРY Depreciation Schedule-Activity-Based End of Year Amounts Depreciation Éxpense Accumulated Year Book Value Depreciation 1 2 3 4 Total
! Required information [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $222,000 including installation. The company estimates that the equipment will have a residual value of $21,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows: Year 1 Hours Used 2,700 2 1,500 B 1,600 4 2,400 5 6 2,200 1,600 3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Activity-Based 65 of 14 Next>
Required information [The following information applies to the questions displayed below.] Cheetah Copy purchased a new copy machine. The new machine cost $122,000 including installation. The company estimates the equipment will have a residual value of $30,500. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 2,000 2,000 2,000 3, 200 3 4 Required: 1. Prepare a depreciation schedule for four years using the straight-line method. (Do not round your intermediate calculations.) CHEETAH COPY Depreciation Schedule-Straight-Line End of Year Amounts Depreciation Expense Accumulated Depreciation Year Book Value 1 2 3 4 Total

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