The choices are method A, Method B, 1000, cr 3000
Homework Answers
Question 1
Correct accounting method : Method B
Depreciation is not a cash expense. So method A is incorrect
Question 2
Method resulting in net book value of zero after 3 years : Method B
Sum of debit balance of fixed asset = 3000
Sum of credit balance of accumulated depreciation = 3000
Net value = 0
Question 3
Method inaccurately reflects changes in cash : Method A
Depreciation is not a cash expense. There is no actual outflow of cash. So method A is incorrect.
Question 4
Method reflecting asset used up economic condition : Method B
Total of accumulated depreciation at the end of year 3 will be 3000 which is equal to the value of fixed asset resulting in nil value of asset.
Question 5
Correct effect on cash account : Cr 3000
Only transaction that affect the cash account is purchase of fixed asset using cash amounting 3000.
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The choices are method A, Method B, 1000, cr 3000
Consider the following two proposed methods...
Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost...
Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost of $140,000 at the beginning of a fiscal year, has an estimated useful life of four years and an estimated residual value of $10,000. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected In the first week of the fourth...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000. Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. C. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance c. Double-Declining-Balance Depreciation Method...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, a...
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Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000. Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance a. Straight-Line Depreciation Method...
1, ABC Inc. has a machine that, as of December 31, 2018, has the following information:...
1, ABC Inc. has a machine that, as of December 31, 2018, has the following information: Cost: $10,800; Residual value: $1,800; Age: 2 years; Accumulated depreciation $6,000. Which of the following statements is correct? a. The useful life of the machine is 6 years. The annual depreciation is $1,500. b. The useful life of the machine is 3 years. The annual depreciation is $3,000. c. The useful life of the machine is 6 years. The annual depreciation is $3,000. d....
Which of the following statements is false? Once you select a depreciation method, then you must...
Which of the following statements is false? Once you select a depreciation method, then you must use this method for all depreciable assets. The balance in the accumulated depreciation account will be the same at the end of an asset's useful life under all the methods allowed under GAAP. The book value at the end of an asset's useful life will be the same under all the depreciation methods allowed under GAAP. The annual depreciation expense and year-end book values...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested Information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested Information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $718,750 on March 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $61,800. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. In the first week of...
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Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost of $110,000 on September 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of four years and an estimated residual value of $7.500. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected On September 6...
Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost of $140,000 at the beginning of a fiscal year, has an estimated useful life of four years and an estimated residual value of $10,000. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected In the first week of the fourth...
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Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000 Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance b. Sum-of-the-Years'-Digits Depreciation Method...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000. Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance a. Straight-Line Depreciation Method...
Which of the following statements is false? Once you select a depreciation method, then you must use this method for all depreciable assets. The balance in the accumulated depreciation account will be the same at the end of an asset's useful life under all the methods allowed under GAAP. The book value at the end of an asset's useful life will be the same under all the depreciation methods allowed under GAAP. The annual depreciation expense and year-end book values...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested Information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested Information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $718,750 on March 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $61,800. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. In the first week of...
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