Question

Highsmith Rental Company purchased an apartment building early in 2021. There are 15 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available: Service Life (in Years) Appliance Stoves Refrigerators Dishwashers Cost $43,000 38,000 36,000 Residual Value $4,000 6,000 5,000 Ana In 2024, two new refrigerators costing $4,100 were purchased for cash. In that same year, the old refrigerators, which originally cost $4,300, were sold for $1,600. Required: 1. Calculate the group depreciation rate, group life, and depreciation for 2021. 2. Prepare the journal entries to record the purchase of the new refrigerators and the sale of the old refrigerators.

Answer 1

Answer Deparciable Depecable L Deprec Peryear ald vigialSalge Αρρlawo valua) ceste: A-B? Cest id 3000 6,500 steves 6 4000390c0 years $6.400 7,750 20650 Rfrigerabscco 46000 Dishean shers 36,0005000 5 years 32,000 431,000 H yeavs $117,000 15000 $l02,000 Total Group oepreciata at Talal depreciahan per yearalal oign 2a650/417.c00 Cost Group Depeeiahicu Pale Group Lif Toal depreciakiou cost /Talal depreaintion per year 102,000/e0650 : Gsoup Life Depreciation for eoel = |170oo xo.18 4.94 -$21060 veteigealor. 2)ourual eulgy or Addihia4 Nees paytieslars Dale LF Debit 4,100 Credit Petrigerato Ae To Casl 4100 Sale &old Refrigevalor. Sales pric 1,600 Total Deprecialion to 2021 do 2029 ie. 3years= eapeute H300 x0.1g X 3 = 2,322 esidual vale shen Retrigeralor ans Sdld$4,3oo- 42,322 BL61 Laes on gale 4etrigerator = $1978 - ,600 =378 Sournaleuty patiaulars Cash Ale LF Debit L600 eredt Dale Dr Dispo sal k Accumulakd Dep vecialion Ak LoSs ou 2,322 DY To efrigerator 4300 reASseig tte pealan aud gales Lave beeu mod lu early go2H