Question

Nov. 30 (To record the sale of machine) (3) Units-of-Production Debit Credit Date Account Titles and Explanation 2018 Mar. 1 Dec. 31 2019 Nov. 30 (To record depreciation expense)

Answer 1

Debit Credit Carla Vista Productions Corp. Date Account Striaght Line 2018 1-Mar-18 Equipment Cash 72,000 72,000 17,500 17,500 31-Dec-18 Depreciation expense Accumulated Depreciation- Equipment 2019 30-Nov-19 Depreciation expense Accumulated Depreciation- Equipment 19,250 19,250 30-Nov-19 Cash Accumulated Depreciation- Equipment Loss on sale of Equipment Equipment 16,000 36,750 19,250 72,000 Double diminishing balance 1-Mar-18 Equipment Cash 72,000 72,000 40,000 40,000 31-Dec-18 Depreciation expense Accumulated Depreciation- Equipment 2019 30-Nov-19 Depreciation expense Accumulated Depreciation- Equipment 19,556 19,556 16,000 59,556 30-Nov-19 Cash Accumulated Depreciation- Equipment Gain on sale of Equipment Equipment 3,556 72,000 Units of Production 1-Mar-18 Equipment Cash 72,000 72,000 25,725 25,725 31-Dec-18 Depreciation expense Accumulated Depreciation- Equipment 2019 30-Nov-19 Depreciation expense Accumulated Depreciation- Equipment 31,500 31,500 16,000 57,225 30-Nov-19 Cash Accumulated Depreciation- Equipment Gain on sale of Equipment Equipment 1,225 72,000

Straight Line Double Diminishing Balance Units of Production Depreciation expense 2018 2019 Total Depreciation expense for two years + Loss (or -gain) on disposal = Net expense for two years 17,500 19,250 36,750 19,250 56,000 40,000 19,556 59,556 (3,556) 56,000 25,725 31,500 57,225 (1,225) 56,000

Workings 1 Straight line method Annual depreciation (Cost-Residual Value)/Useful Life =(72,000-9,000)/3 years 21,000 Calculation Years of Useful life Cost Annual Depreciation Accumulated Depreciation Ending book value Annual Depreciation 2018 72,000 17,500 17,500 54,500 =21,000*10/12 2019 72,000 19,250 36,750 35,250 =21,000*11/12 Cost less Accumulated Depreciation 2 Double declining balance method Double declining rate 100%/Useful Life*2 =100%/3 years*2 67% Years of Useful life 2018 2019 Beg. book value 72,000 32,000 Annual Depreciation Accumulated Depreciation Ending book value Annual Depreciation 40,000 40,000 32,000 =72,000*67%*10/12 19,556 59,556 12,444 =32,000*67%*11/12 3 Units of production method Dep per unit of production =(72,000-9,000)/12,000 units 5.25 Cost Years of Useful life 2018 2019 72,000 72,000 Annual Depreciation Accumulated Depreciation Ending book value Annual Depreciation 25,725 25,725 46,275 -4,900*5.25 31,500 57,225 14,775 -6,000*5.25