Question

Chapter 8 Problem 8-21 or 8-2B Name Units-of- Production Double- Declining- Balance Straight line Totals Workapace : machno w is 257, 500 hele lewers) Seluge 20.00 Straight-Line: Units-of-Production: ATL-125.000 UMS near 22. ODS par 2 - 124.600 und Hear3 : 1 00 u year 4-15, 200 unts Double-Declining-Balance:

i need it to be answered as soon as possible please

Answer 1

Total Cost of asset: 20515+1485 = 22000 (A)

Salvage Value = 2000 (B); Life = 5 yrs (C).

Depreciation => (22000-2000)/5 = 4000.

So,

Year	Original Value	Depreciation	WDV
2016	22000	4000	18000

1-a.

There is revision in the Useful life and salvage value of asset.

So, Depreciation = (wdv - salvage value)/no of years remaining ie, (18000-2400)/(4-1) => 5200.

Hence, depreciation for 2017 is $ 5200.

1-b.

Computation of Gain/loss on sale of aset

Sale proceeds received		5300
Less: WDV of asset as on the date of sale
WDV @ begining of 2018 (ie 18000-5200)	12800
- Depreciation upto the date of sale	(5200)	(7600)
So, Loss on sale of the asset		(2300)

1-c

Journal Entries

01- jan- 16	Delivery Truck a/c (20515+1485)	22000
	To Cash a/c		22000
	(Being asset purchased for cash)
31.-dec-16	Depreciation expense(Note 1)	4000
	To Delivery Truck a/c		4000
	(depreciation charged for first year)
31- dec -17	Depreciation expense (1-a)	5200
	To Delivery Truck a/c		5200
	(depreciation charged for second year)
31- dec -18	Depreciation Expense a/c	5200
	To Delivery truck a/c		5200
	(depreciation charged upto the date of sale)
31 - dec - 18	Cash a/c	5300
	Loss on sale of asset	2300
	To delivery truck a/c		7600
	(Being delivery truck sold and loss on sale realised)

Please comment for any further query on the solution.