On January 1, 2011, Klinefelter Company purchased a building for $520,000. The building had an estimated...
On January 1, 2011, Klinefelter Company purchased a building for $520,000. The building had an estimated life of 20 years and an estimated residual value of $20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2017, the following independent situations occur:
| a. | The company estimates that the building has a remaining life of 10 years (for a total of 16 years). |
| b. | The company changes to the sum-of-the-years’-digits method. |
| c. | The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. |
Required:
| For each of the independent situations, prepare all journal entries related to the building for 2017. Ignore income taxes. |
Homework Answers
Add Answer to:
On January 1, 2011, Klinefelter Company purchased a building for
$520,000. The building had an estimated...
Bailand Company purchased a building for $286,000 that had an estimated residual value of $6,000 and...
Bailand Company purchased a building for $286,000 that had an estimated residual value of $6,000 and an estimated service life of 10 years. Bailand purchased the building 4 years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation expense for the year), the following independent situations occur: 1. Bailand estimates that the asset has 8 years’ life remaining (for a total of 12 years). 2. Bailand changes to the sum-of-the-years’-digits method. 3....
Bailand Company purchased a building for $366,000 that had an estimated residual value of $16,000 and...
Bailand Company purchased a building for $366,000 that had an estimated residual value of $16,000 and an estimated service life of 10 years. Bailand purchased the building 4 years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation expense for the year), the following independent situations occur: 1. Bailand estimates that the asset has 8 years' life remaining (for a total of 12 years). 2. Bailand changes to the sum-of-the-years'-digits method. 3....
On January 1, Tolson Company purchased a building by paying $85,000. The building has an estimated...
On January 1, Tolson Company purchased a building by paying $85,000. The building has an estimated life of 40 years and an estimated residual value of $5,000. At December 31, for what gross value will the building appear on the balance sheet? How much accumulated depreciation will be reported at that same date? What will be the net book value of the building on December 31?
QUESTION 9 BEST Company purchased specialized equipment on January 1, 2011, that cost $100,000, has a residual valu...
QUESTION 9 BEST Company purchased specialized equipment on January 1, 2011, that cost $100,000, has a residual value of $20,000, and a useful life of five years. The amount of depreciation for 2011 (rounded to nearest dollar) under the sum of the years' digits method is: $33,333. $26,667. $36,000. $20,000 None of the above.
Murgatroyd Co. purchased equipment on January 1, 2016, for $520,000, estimating a four-year useful life and...
Murgatroyd Co. purchased equipment on January 1, 2016, for $520,000, estimating a four-year useful life and no residual value. In 2016 and 2017, Murgatroyd depreciated the asset using the sum-of-years'-digits method. In 2018, Murgatroyd changed to straight-line depreciation for this equipment. What depreciation would Murgatroyd record for the year 2018 on this equipment? (Do not round your depreciation rate.) Multiple Choice $ 78,000. $130,000. $156,000. None of these answer choices are correct.
Mango Inc. purchased a new truck on Oct 1, 2011 for $110,000. The truck was placed...
Mango Inc. purchased a new truck on Oct 1, 2011 for $110,000. The truck was placed in service on the same day. The truck had an estimated life of 5 years with an estimated residual value of $10,000. Use excel spreadsheet to prepare depreciation tables which include depreciation expenses, accumulated depreciation and book value of the truck over the asset's life under straight line, double decline balance and sum-of-years digits methods assuming. Mango record depreciation to the closest whole month...
On January 1, 2019, ABC, Inc. purchased equipment for $64,000. The equipment had an estimated useful...
On January 1, 2019, ABC, Inc. purchased equipment for $64,000. The equipment had an estimated useful life of 8 years and an estimated salvage value of $3,160. Assume the company employs the sum-of-the-years-digits' method of depreciation. Calculate the book value of the equipment at December 31, 2022.
Brief Exercise 11-3 Oriole Company purchased machinery on January 1, 2017, for $90,400. The machinery is estimated to ha...
Brief Exercise 11-3 Oriole Company
purchased machinery on January 1, 2017, for $90,400. The machinery
is estimated to have a salvage value of $9,040 after a useful life
of 8 years. Compute 2017 depreciation expense using the
sum-of-the-years'-digits method. Depreciation expense $ LINK TO
TEXT Compute 2017 depreciation expense using the
sum-of-the-years'-digits method, assuming the machinery was
purchased on April 1, 2017. (Round answer to 0 decimal places, e.g.
5,125.) Depreciation expense $ Click if you would like to Show...
Akron Incorporated purchased an asset on September 1 of Year 1 for $375,000. The estimated residual...
Akron Incorporated purchased an asset on September 1 of Year 1 for $375,000. The estimated residual value is $15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation for Year 1 using the sum-of-the-years'-digits method. $ Calculate the depreciation for Year 2 using the sum-of-the-years'-digits method.
Pearl Co. purchased a equipment on January 1, 2015, for $506,000. At that time, it was...
Pearl Co. purchased a equipment on January 1, 2015, for $506,000. At that time, it was estimated that the equipment would have a 10-year life and no salvage value. On December 31, 2018, the firm’s accountant found that the entry for depreciation expense had been omitted in 2016. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2018. At present, the company uses the sum-of-the-years’-digits method for depreciating equipment....
Bailand Company purchased a building for $366,000 that had an estimated residual value of $16,000 and an estimated service life of 10 years. Bailand purchased the building 4 years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation expense for the year), the following independent situations occur: 1. Bailand estimates that the asset has 8 years' life remaining (for a total of 12 years). 2. Bailand changes to the sum-of-the-years'-digits method. 3....
QUESTION 9 BEST Company purchased specialized equipment on January 1, 2011, that cost $100,000, has a residual value of $20,000, and a useful life of five years. The amount of depreciation for 2011 (rounded to nearest dollar) under the sum of the years' digits method is: $33,333. $26,667. $36,000. $20,000 None of the above.
Brief Exercise 11-3 Oriole Company
purchased machinery on January 1, 2017, for $90,400. The machinery
is estimated to have a salvage value of $9,040 after a useful life
of 8 years. Compute 2017 depreciation expense using the
sum-of-the-years'-digits method. Depreciation expense $ LINK TO
TEXT Compute 2017 depreciation expense using the
sum-of-the-years'-digits method, assuming the machinery was
purchased on April 1, 2017. (Round answer to 0 decimal places, e.g.
5,125.) Depreciation expense $ Click if you would like to Show...
Most questions answered within 3 hours.
-
The Problem: The Case of the Harmonizing Vacations
Your CEO is exploring partnering with a European...
asked 41 minutes ago -
A chemical equation is balanced by adding coefficients in front
of some formulas so that the...
asked 39 minutes ago -
From the literature (reference your sources): What are the
lattice parameters of calcite and aragonite? Why...
asked 1 hour ago -
Your system is rejecting the question am asking which is
preceded by a case study. It...
asked 1 hour ago -
3. On January 2, 2000, Larry creates a trust with himself as
trustee. Larry as trustee...
asked 1 hour ago -
A member of the volleyball team spikes the ball. During this
process, she changes the velocity...
asked 1 hour ago -
Are adult gamers less likely to use a gaming console (Xbox,
PlayStation, Wii, etc...) than teen...
asked 2 hours ago -
The University of
Texas recently reported that 43% of college students aged 18-24
would spend their...
asked 2 hours ago -
The length of stay at a specific emergency department in
Phoenix, Arizona, in 2009 had a...
asked 1 hour ago -
. Please give the mechanism for this type of problem. Step by
Step
The toxin that...
asked 1 hour ago -
If you have a 1M stock solution and you want to dilute 1 :10
with water,...
asked 1 hour ago -
In a load instruction, the effective address is obtained by
A) Retriving the address from a...
asked 1 hour ago