Credit of 2/15, net 45 means the entity is allowed 2% discount if payment is made within 15 days, else entire payment be made within 45 days. As PCI takes advantage of such discounts, the total amount spent on purchase of 15 copiers is ($9190*15*0.98) i.e. $135,093.
Now, Annual Depreciation per copier = (Cost - residual value)/useful life
= [(9190*0.98) - 900 ] / 5
= 1621.24
Annual Depreciation rate as per Double Declining Method = (1621.24/9006.2) * 2
= 36%
(a). Schedule with Annual Depreciation
Year-end | Asset Value | Dep (36%) | Remaining Value (Asset Value less accumulated depreciation) |
1 | 135093 | 48633.48 | 86459.52 |
2 | 135093 | 48633.48 | 37826.04 |
3 | 135093 | 24326.04 | 13500 |
4 | - | - | 13500 |
5 | - | - | 13500 |
(b).
Annual Repair and Maintenance | |||||
Year | R&M ($) per copier | No. of Copiers | Total expense | ||
2018 | 50 | 15 | 750 | ||
2019 | 20 | 15 | 300 | ||
2020 | 300 | 15 | 4500 | ||
2021 | 500 | 15 | 7500 | ||
2022 | 500 | 15 | 7500 | ||
2023 | 500 | 15 | 7500 | ||
28050 | |||||
(c). Journal Entries
2018 | Copiers A/c Dr | 135093 | ||||
To Bank | 135093 | |||||
(Being 15 copiers purchased) | ||||||
Repairs & Maintenance A/c Dr | 750 | |||||
To Cash A/c | 750 | |||||
(Being annual R&M expense met) | ||||||
Depreciation A/c Dr | 48633.48 | |||||
To Accumulated Depreciation | 48633.48 | |||||
(Being depreciation charged.) | ||||||
2019 | Repairs & Maintenance A/c Dr | 300 | ||||
To Cash A/c | 300 | |||||
(Being annual R&M expense met) | ||||||
Depreciation A/c Dr | 48633.48 | |||||
To Accumulated Depreciation | 48633.48 | |||||
(Being depreciation charged.) | ||||||
2020 | Repairs & Maintenance A/c Dr | 4500 | ||||
To Cash A/c | 4500 | |||||
(Being annual R&M expense met) | ||||||
Depreciation A/c Dr | 24326.04 | |||||
To Accumulated Depreciation | 24326.04 | |||||
2021 | Repairs & Maintenance A/c Dr | 7500 | ||||
To Cash A/c | 7500 | |||||
(Being annual R&M expense met) | ||||||
2022 | Repairs & Maintenance A/c Dr | 7500 | ||||
To Cash A/c | 7500 | |||||
(Being annual R&M expense met) | ||||||
2023 | Repairs & Maintenance A/c Dr | 7500 | ||||
To Cash A/c | 7500 | |||||
(Being annual R&M expense met) | ||||||
You are a staff accountant at a confectionary company, Philly Chocolates International the Company" or PCI)....
You are a staff accountant at a confectionary company, Philly Chocolates International (“the Company” or PCI). The lease on the current multifunction copiers the Company has in its headquarters is almost up. PCI has decided to replace the current copiers with Canon imageRunnerAdvanceC55501 copiers. The CFO has asked you to investigate the impact to the financial statements over the next five years if PCI buys the copiers for cash. The following is the information you have been able to gather...
You are a staff accountant at a confectionary company, Philly Chocolates International ("the Company or PCI). The lease on the current multifunction copiers the Company has in its headquarters is almost up. PCI has decided to replace the current copiers with Canon imageRunnerAdvanceC55501 copiers. The CFO has asked you to investigate the impact to the financial statements over the next five years if PCI buys the copiers for cash. The following is the information you have been able to gather...
You are a staff accountant at a confectionary company, Philly Chocolates International (“the Company” or PCI). The lease on the current multifunction copiers the Company has in its headquarters is almost up. PCI has decided to replace the current copiers with Canon imageRunnerAdvanceC55501 copiers. The CFO has asked you to investigate the impact to the financial statements over the next five years if PCI buys the copiers for cash. The following is the information you have been able to gather...
I need help with a-e but please focus on d and e. Thank you! You are a staff accountant at a confectionary company, Philly Chocolates International the Company" or PCI). The lease on the current multifunction copiers the Company has in its headquarters is almost up PCI has decided to replace the current copiers with Canon imageRunnerAdvanceC55501 copiers. The CFO has asked you to investigate the impact to the financial statements over the next five years if PCI buys the...
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