11) Answer : C. $150000 paid for the exploration of a natural resource deposit. | ||||||||
option A,B,D are having indefinite life. | ||||||||
12) Answer : B. Cost of machine which will be used exclusively for research and development | ||||||||
All other options A,C,D, are carried forward with the asset. | ||||||||
13) Answer : D. $11675 | ||||||||
Costs should be capitalized = | ||||||||
Pur. Price + Sales tax + Ins. In transit + testing= | ||||||||
10000+875+300+500=$11675 | ||||||||
(the repair cost are revenue expense, not capital) | ||||||||
14) D. $11200 gain | ||||||||
DDB dep. Method: Rate (100/5)*2= 40% | ||||||||
2017 year dep. 80000*40%=32000 | ||||||||
2018 year dep. (80000-32000)*40%=19200 | ||||||||
Gain on sale = Cash+ Acc. Dep - Cost of purchase = | ||||||||
Gain on sale =40000+ (32000+19200) - 80000 = $11200 | ||||||||
15) Answer : B. $42000 | ||||||||
Depreciation series : 4/10,3/10,2/10&1/10 | ||||||||
Depreciation for 2018 (2nd year) = (150000-10000)*3/10 = $42000 |
Answers? amortized over its useful life? would be 11. Which of the following A, $100,000 spent...
8. A company purchased a machine for $190.000. The machine has a useful life of 8 produce 750,000 units over its useful life. Determine depreciation expense when output is 109,000 units A. $25,200. 8. $26,160 С. $ 26,660. D. $27,613. E. $53,160 years, a residual value of $10,000, and can deprecilation method in which a plant asset's depreciation depreciation rate to the asset's beginning-of-period book value is called A. Book value depreciation B. Declining-balance depreciation. C. Straight-ine depreciation. D. Units-of-production...
Which of the following would be debited to an expense account? A) $3,200 spent to repair the motor on a machine. The expenditure did not increase the life of the machine beyond the original estimate. B) $4,000 spent in overhauling an engine, which increased its estimated useful life by four years C) Installation of automatic controls on a factory machine D) Purchase of a new automobile to be used by the owner of a business
Melody Corporation purchased a machine for $500,000. This machine has a useful life of 10 years and an estimated salvage of $20,000. Depreciation was recorded on a straight-line basis for 8 years. After recording depreciation expense in the 8th year, Melody sold the machine for $100,000. (a) What is the carrying value of the machine at the point of sale? (11 pts) (b) How much gain or loss should Melody report on the sale? (7 pts). Clearly identify if the...
24. Over the course of the life of a fixed asset a. Accumulated Depreciation will increase but not exceed depreciable cost. b. book value will decrease but not fall below residual value. c. book value may or may not approximate replacement cost. d. all of the above are correct. 25. During the current year, Gardner Home Center sold 800 power washers for $350 each. The power washers carry a 2-year warranty for repairs. Estimates indicate that repair costs will average...
1) A new machine costs $35,000, and has a useful life of 10 years. Its estimated salvage value at the end of year 10 is $15,000. (a) Determine the depreciation for years 1-10. You should do this in two ways: first using straight-line depreciation (with the salvage value of $15,000), and then using double-declining balance depreciation (b) Compute present worth of the two sequences of depreciation amounts. You can use a discount rate (minimum acceptable rate of return) of 10%...
McCartney Manufacturing purchased a dryer for $100,000 on January 1, 2014. The estimated life of the dryer is five years, and the salvage value is estimated to be $10,000. McCartney uses the straight-line method of depreciation. On January 1, 2018, McCartney paid $160,000 to have the dryer overhauled, which increased the speed of the dryer and extended its estimated useful life to December 31, 2021. Each year, McCartney pays $1,000 to have the dryer serviced. On November 12, 2018, a major...
Blossom Co. purchased equipment for $600,400 which was estimated to have a useful life of 10 years with a salvage value of $8,400 at the end of that time. Depreciation has been entered for 7 years on a straight-line basis. In 2018, it is determined that the total estimated life should be 15 years with a salvage value of $4,600 at the end of that time. (a) Prepare the entry (if any) to correct the prior years’ depreciation. (b) Prepare...
On July 1, 2019, Cullumber Company purchased new equipment for $85,000. Its estimated useful life was 5 years with a $12,000 salvage value. On January 1, 2022, before making its depreciation entry for 2022, the company estimated the remaining useful life to be 10 years beyond December 31, 2022. The new salvage value is estimated to be $5,000. A.) Prepare the journal entry to record depreciation on December 31, 2019. B.) Prepare the journal entry to record depreciation on December...
Depreciation Schedules Barb's Florists Name: Cost Expected salvage value Estimated useful life in years Estimated useful life in miles $13.000 $1.000 Purchased new truck Jan 1, 2012 Sold Dec 31, 2013 for $7,500 100 Complete A, B, C, D Intro thru SL Depr 8 min >> A. Prepare the straight line depreciation table. Straight-line Year Depr% Deprec Exp Purchase Notes calculations Truck Date of Purchase Accum Book Value Depreciation Rate Cost Salvage Value Depeche Cost 1st year Months Date of...
27. On January 1, a machine with a useful life of four years and a residual (salvage) value of $5,000 was purchased for $55,000. What is the depreciation expense for year 3 under straight-line depreciation? A) $10,000. B) $5,000. C) $55,000. D) $30,000.