given equipment cost $100,000
life 4years
method of depreciation double declining balance
record the entry when purchased if the equipment was purchasedfor cash
cash I
the equipment is used for 6years and the disposed
record the entry for this transaction
cashII
the equipment is sold at the end of 3years for $15,000
record the entry for this transaction
cashII
the equipment is solf at the end of 3years for $15,000
record the entry for this transaction
given equipment cost $100,000
life 4years
method of depreciation double declining balance
record the entry when purchased if the equipment was purchasedfor cash
cash I
the equipment is used for 6years and the disposed
record the entry for this transaction
cashII
the equipment is sold at the end of 3years for $15,000
record the entry for this transaction
cashII
the equipment is solf at the end of 3years for $15,000
record the entry for this transaction
Related questions
The Collins Corporation purchased office equipment at thebeginning of 2014 and capitalized a cost of $2,270,000. This costincluded the following expenditures: |
| Purchase price | $ | 2,030,000 | |
| Freight charges | 48,000 | ||
| Installationcharges | 38,000 | ||
| Annual maintenancecharge | 154,000 | ||
| Total | $ | 2,270,000 | |
The company estimated aneight-year useful life for the equipment. No residual value isanticipated. The double-declining-balance method was used todetermine depreciation expense for 2014 and 2015. |
In 2016, after the 2015 financialstatements were issued, the company decided to switch to thestraight-line depreciation method for this equipment. At that time,the companyâs controller discovered that the original cost of theequipment incorrectly included one year of annual maintenancecharges for the equipment. |
| Required: |
| 1 &2. | Ignoring income taxes, prepare the appropriate correcting entryfor the equipment capitalization error discovered in 2016 and any2016 journal entry(s) related to the change in depreciationmethods. (If no entry is required for a transaction/event,select "No journal entry required" in the first accountfield.) 1. Record the entry to correct incorrect accounts. 2. Record entry in 2016 due to the change in depreciationmethods. 3. Record the 2016 adjusting entry for depreciation. |
New lithographic equipment, acquired at a cost of $875,000 atthe beginning of a fiscal year, has an estimated useful life offive years and an estimated residual value of $75,300. The managerrequested information regarding the effect of alternative methodson the amount of depreciation expense each year. On the basis ofthe data presented to the manager, the double-declining-balancemethod was selected.
In the first week of the fifth year, the equipment was sold for$128,100.
1. Determine the annual depreciation expensefor each of the estimated five years of use, the accumulateddepreciation at the end of each year, and the book value of theequipment at the end of each year by the following methods:
a. Straight-line method
Year | Depreciation Expense | Accumulated Depreciation End of Year | Book Value End of Year |
1 ________________ ______________________ _____________________________
2 ________________ ______________________ _____________________________
3 ________________ ______________________ _____________________________
4 ________________ ______________________ _____________________________
5 ________________ ______________________ ____________________________
b. Double-declining-balance method
Year | Depreciation Expense | Accumulated Depreciation End of Year | Book Value End of Year |
1 ________________ ______________________ _____________________________
2 ________________ ______________________ _____________________________
3 ________________ ______________________ _____________________________
4 ________________ ______________________ _____________________________
5 ________________ ______________________ ____________________________
2. Journalize the entry to record the sale, assumingdouble-declining balance method is used. If an amount box does notrequire an entry, leave it blank.
Cash __________ _______________
Accumulated Depreciation __________ _______________
Equipment __________ _______________
Gain On sale of equipment __________ _______________
3. Journalize the entry to record the sale, assuming that theequipment was sold for $110,000 instead of $128,100. If an amountbox does not require an entry, leave it blank.
Cash __________ _______________
Accumulated Depreciation __________ _______________
loss On sale of equipment __________ _______________
Equipment __________ _______________
