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Purchase Price | $46,000 | |||||
Sales tax | $3,250 | |||||
Shipping costs | $200 | |||||
Insurance during shipping | $110 | |||||
Intallation and testing costs | $90 | |||||
Total Cost of machine | $49,450 | |||||
Date | Account and explanation | Debit | Credit | |||
1 | Equipment | $49,450 | ||||
Cash | $49,450 | |||||
Depreciation expenses[($49,450-$4,200)/5] | $9,050 | |||||
Accumulated Depreciation-Equipment | $9,050 | |||||
Calculation of Depreciation expenses for Machine B under different methods | ||||||
Straight Line | ||||||
Date | Cost of asset | Depreciable cost | Useful life | Depreciation expenses | Accumulated Depreciation | Book value |
At Acquisition | $1,80,000 | |||||
2020 | $1,80,000 | $1,70,150 | 4 Years | $42,538 | $42,538 | $1,37,463 |
2021 | $1,80,000 | $1,70,150 | 4 Years | $42,538 | $85,075 | $94,925 |
2022 | $1,80,000 | $1,70,150 | 4 Years | $42,538 | $1,27,613 | $52,388 |
2023 | $1,80,000 | $1,70,150 | 4 Years | $42,538 | $1,70,150 | $9,850 |
Double Declining balance | ||||||
Date | Cost of asset | Book Value | DDB Rate | Depreciation expenses | Accumulated Depreciation | Book value |
At Acquisition | $1,80,000 | |||||
2020 | $1,80,000 | $1,80,000 | 50.00% | $90,000 | $90,000 | $90,000 |
2021 | $1,80,000 | $90,000 | 50.00% | $45,000 | $1,35,000 | $45,000 |
2022 | $1,80,000 | $45,000 | 50.00% | $22,500 | $1,57,500 | $22,500 |
2023 | $1,80,000 | $22,500 | 50.00% | $11,250 | $1,68,750 | $11,250 |
Units of activity | ||||||
Date | Cost of asset | Depreciation per unit | No. of units | Depreciation expenses | Accumulated Depreciation | Book value |
At Acquisition | $1,80,000 | |||||
2020 | $1,80,000 | $1.25 | 49000 | $61,250 | $61,250 | $1,18,750 |
2021 | $1,80,000 | $1.25 | 38000 | $47,500 | $1,08,750 | $71,250 |
2022 | $1,80,000 | $1.25 | 27000 | $33,750 | $1,42,500 | $37,500 |
2023 | $1,80,000 | $1.25 | 22120 | $27,650 | $1,70,150 | $9,850 |
On January 1, 2020, Flint Company purchased the following two machines for use in its production...
Problem 10-03A a-c On January 1, 2020, Flint Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $46,000. Related expenditures included: sales tax $3,250, shipping costs $200, insurance during shipping $110, installation and testing costs $90, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Flint estimates that the useful life of the machine is 5 years with a...
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On January 1, 2020, Riverbed Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $52,000. Related expenditures included: sales tax $1,900, shipping costs $200, insurance during shipping $60, installation and testing costs $90, and $200 of oil and lubricants to be used with the machinery during its first year of operations. Riverbed estimates that the useful life of the machine is 5 years with a $5,200 salvage value...
Flint Company purchased a delivery truck for $29,000 on January 1, 2020. The truck has an expected salvage value of $2,740, and is expected to be driven 101,000 miles over its estimated useful life of 10 years. Actual miles driven were 16,600 in 2020 and 13,100 in 2021. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciation expense $ per mile Compute depreciation expense for 2020 and 2021 using (1) the straight-line...
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Problem 10-03A a-c (Part Level Submission) On January 1, 2020, Flint Company purchased the following two machines for use in its production process. Machine A The cash price of this machine was $46,000. Related expenditures included: sales tax $3,250, shipping costs $200, insurance during shipping $110, installation and testing costs $90, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Flint estimates that the useful life of the machine is 5...
On January 1, 2015, Zidan Company purchased the following Two Machines for use in its production process. Machine A: The cash price of this machine was Tk.55,000. Related expenditures included: sales tax Tk.2,750, shipping costs Tk.100, insurance during shipping Tk.75, installation and testing costs Tk.75, and Tk.90 of oil and lubricants to be used with the machinery during its first year of operation. Zidan estimates that the useful life of the machine is 4 years with a Tk.5,000 salvage value...