College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 5A, Problem 2SEB
To determine
Prepare a depreciation schedule showing the depreciation expense,
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Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciationmethods: straight-line,units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared.
Begin by preparing a depreciation schedule using thestraight-line method.
Straight-Line Depreciation Schedule
Depreciation for the Year
Asset
Depreciable
Useful
Depreciation
Accumulated
Book
Date
Cost
Cost
Life
Expense
Depreciation
Value
1-2-2024
$30,000
$30,000
12-31-2024
$24,000
÷
4 years
=
$6,000
$6,000
24,000
12-31-2025
24,000
÷
4 years
=
6,000
12,000
18,000
12-31-2026
24,000
÷
4 years
=
6,000
18,000
12,000
12-31-2027
24,000
÷
4 years
=
6,000
24,000
6,000
Before calculating the units-of-production depreciationschedule, calculate the…
Determine the machine's second-year depreciation and year end book value under the straight-line method.
Straight-Line Depreciation
Choose Numerator: /
Choose Denominator:
=
Annual Depreciation
Expense
=
Depreciation expense
Year 2 Depreciation
nces
Year end book value (Year 2)
=
Compute the first-year depreciation using the straight-line method.
Straight-Line Depresiation
Annual Depreciation
Expense
Choose Numerator:
Choose Denominator:.
| Depreciation expense
Chapter 5A Solutions
College Accounting, Chapters 1-27
Ch. 5A - List three depreciation methods used for financial...Ch. 5A - Which depreciation method is used for tax...Ch. 5A - STRAIGHT-LINE DEPRECIATION A small deliver truck...Ch. 5A - SUM-OF-THE-YEARS'-DIGITS DEPRECIATION Using the...Ch. 5A - Prob. 3SEACh. 5A - MODIFIED ACCELERATED COST RECOVERY SYSTEM Using...Ch. 5A - STRAIGHT-LINE DEPRECIATION A computer was...Ch. 5A - Prob. 2SEBCh. 5A - DOUBLE-DECLININGBALANCE DEPRECIATION Using the...Ch. 5A - MODIFIED ACCELERATED COST RECOVERY SYSTEM Using...
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- Obj. 2 PR 9-2A Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3. Instructions 1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining- balance method. Also determine the total depreciation expense for the three years by each (Continued)arrow_forward[The following information applies to the questions displayed below.] Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $83,600. The machine's useful life is estimated at 20 years, or 398,000 units of product, with a $4,000 salvage value. During its second year, the machine produces 33,800 units of product.arrow_forward6. Describe how to apply Straight-Line Depreciation, Declining Balance Depreciation, Double Declining Balance Depreciation, and Sum-of-the-Years' Digits Depreciation methods and include examples of calculations and journal entries used for each method.arrow_forward
- Under what depreciation method(s) is an asset’s bookvalue used to calculate depreciation each year?a. Straight-line methodb. Units-of-production methodc. Declining-balance methodd. Weighted-average-cost methodarrow_forwardContrast the effects of the three depreciation methods on (1) depreciation expense, (2) net income, (3) accumulated depreciation, and (4) carrying amount in each of the following: (a) the early years of an asset's life, and (b) over the total life of the asset. ac7031dcd9e03....pdf (1) Depreciation Expense Same each year Varies with number of units produced Decreases each year Type here to search All three result in the same total depreciation expense 2aac7031dcd9e03....pdf Bi (2) Net Income Constant charge (depreciation expense) to income Impact on income will vary with the number of units produced Increasing income each year because depreciation expense is lower each year All three result in the same total impact on net income 22°C Sunnyarrow_forwardRequirement 1. For each depreciation method, prepare a depreciation schedule showing asset cost, depreciation expense, accumulated depreciation, and asset book value for each year of the asset's life. For the units of production method, round depreciation per unit to three decimal places. Before completing the straight-line depreciation schedule, calculate the straight-line depreciation rate. One year Useful life (SL) Depreciation rate - X 1 More Info - X Requirements Complete the Straight-Line Depreciation Schedule. Begin by filling out the schedule through 2019, and then complete the schedule by entering the amounts through 2022. On January 4, 2018, Bailey Enterprises, Inc., paid $205,600 for equipment used in manufacturing automotive supplies. In addition to the basic purchase price, the company paid $1,000 for transportation charges, $100 for insurance for the equipment while in transit, $10,500 sales tax, and $2,800 for a special which to place the equipment in the plant.…arrow_forward
- Following the depreciation example on page 7-7 of the VLN determine Activity based year 2 accumulated depreciation_______arrow_forwardHow to do depreciation with sum-of-the-year digit method.arrow_forwardThe depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of months or years is called the a.straight-line method. b.declining-balance method. c.sum-of-the-years'-digit method. d.units-of-production method.arrow_forward
- The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of months or years is called the a.units-of-production method. b.straight-line method. c.declining-balance method. d.sum-of-the-years'-digits method.arrow_forwardCalculate the Total Cost, total, depreciation and annual depreceation for the following assets by using the line method. (Round to Straight nearest Cent) Cost 76,400 1,500 Shipping Charges Annust Total Cost Salunge Value Useful Depreciation Depreistion 4,500 life ↑ years 11arrow_forwardSullivan Ranch Corporation has purchased a new tractor. The following information is given: $150,000 $10,000 Cost: Estimated Residual: Estimated Life in years: Estimated Life in hours: Actual Hours: Year 1 Year 2 Year 3 Year 4 4 1200 Required: 1. Prepare the following Straight-Line depreciation schedule by using the Excel SLN function to calculate Depreciation Expense and entering formulas for the remaining cells. Use absolute cell references when appropriate. (Use cells A4 to B12 from the given information to complete this question.) Year 1 2 360 270 350 220 3 4 Total Depreciation Schedule-Straight-Line Method End of year amounts Depreciatio Depreciatio n Expense n SULLIVAN RANCH CORPORATION Book Valuearrow_forward
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