Log in
Accounting
1
answer
0
watching
368
views

A truck with a cost of $82,000 has an estimated residual valueof $16,000, an estimated useful life of 12 years, and isdepreciated by the straight-line method.

(a) Determine the amount of the annual depreciation,

(b) Assuming that at the start of the eighth year the remaininglife is estimated to be six years and the residual value isestimated to be $12,000, determine the depreciation expense foreach of the remaining six years,

(c) explain why depreciation is recalculated in situations likethis.

Watch
1
answer
0
watching
368
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Deanna Hettinger
Deanna HettingerLv2
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related questions

1. A truck with a cost of $82,000 has an estimated residualvalue of $16,000, an estimated useful life of 12 years, and isdepreciated by the straight-line method. (a) Determine the amountof the annual depreciation, (b) Assuming that at the start of theeighth year the remaining life is estimated to be six years and theresidual value is estimated to be $12,000, determine thedepreciation expense for each of the remaining six years, (c)explain why depreciation is recalculated in situations likethis.

2. Equipment was acquired at the beginning of the year at a costof $465,000. The equipment was depreciated using the straight-linemethod based on an estimated useful life of 15 years and anestimated residual value of $45,000.

What was the depreciation for the first year?

Assuming the equipment was sold at the end of the eighth yearfor $235,000, determine the gain or loss on the sale of theequipment.

Journalize the entry to record the sale.

3. Glacier Mining Co. acquired mineral rights for $494,000,000.The mineral deposit is estimated at 475,000,000 tons. During thecurrent year, 31,500,000 tons were mined and sold.

Determine the depletion rate.

Determine the amount of the depletion expense for the currentyear.

Journalize the adjusting entry on December 31 to record thedepletion expense.

Why is depletion taken on mineral rights?

4. On December 31, it was estimated that goodwill of $6,000,000was impaired. In addition, a patent with an estimated usefuleconomic life of 12 years was acquired for $1,500,000 on April1.

Journalize the adjusting entry on December 31 for the impairedgoodwill.

What is goodwill?

What does it mean for goodwill to be impaired?

Journalize the adjusting entry on December 31 for theamortization of the patent rights.

Why are patents and other intangible assets amortized?

1.On August 7, Green River InflatablesCo. paid $1,675 to purchase and install a hydraulic lift, and $40for an air filter for one of its delivery trucks.

a.Journalize the entries for the newhydraulic lift and the air filter expenditure.

b.Why are expenditures on equipment andother fixed assets sometimes capitalized (treated as an asset) andother times expensed?

2.Equipment acquired at the beginningof the year at a cost of $440,000 has an estimated residual valueof $25,000 and an estimated useful life of 8 years. Straight-linedepreciation is used. Determine (a) the total amount to bedepreciated over the life of the asset, (b) the amount ofdepreciation each year, (c) the journal entry to record the firstyear’s depreciation, (d) the book value of the asset at the end ofthe first year.

3.A tractor acquired at a cost of$275,000 has an estimated residual value of $39,000, an estimateduseful life of 40,000 hours, and was operated 2,660 hours duringthe first year. Determine (a) the total amount to be depreciatedover the life of the asset, (b) the amount of depreciation for theyear, (c) the journal entry to record the year’s depreciation, (d)the book value of the asset at the end of the first year, (e)explain why units of output may be preferred overstraight line as a method of depreciating the tractor.

4. Equipment acquired at the beginning of the year at a cost of$280,000 has an estimated residual value of $45,000 and anestimated useful life of 16 years. Determine: (a) thedouble-declining-balance rate, (b) the double-declining-balancedepreciation for the first year, (c) the journal entry to recordthe first year’s depreciation, (d) the book value at the end of thefirst year, (e) explain the advantages double-declining-balance may have over straight line in depreciatingassets.

5. A truck with a cost of $82,000 has an estimated residualvalue of $16,000, an estimated useful life of 12 years, and isdepreciated by the straight-line method. (a) Determine the amountof the annual depreciation, (b) Assuming that at the start of theeighth year the remaining life is estimated to be six years and theresidual value is estimated to be $12,000, determine thedepreciation expense for each of the remaining six years, (c)explain why depreciation is recalculated in situations likethis.

6. Equipment was acquired at the beginning of the year at a costof $465,000. The equipment was depreciated using the straight-linemethod based on an estimated useful life of 15 years and anestimated residual value of $45,000.

What was the depreciation for the first year?

Assuming the equipment was sold at the end of the eighth yearfor $235,000, determine the gain or loss on the sale of theequipment.

Journalize the entry to record the sale.

7. Glacier Mining Co. acquired mineral rights for $494,000,000.The mineral deposit is estimated at 475,000,000 tons. During thecurrent year, 31,500,000 tons were mined and sold.

Determine the depletion rate.

Determine the amount of the depletion expense for the currentyear.

Journalize the adjusting entry on December 31 to record thedepletion expense.

Why is depletion taken on mineral rights?

8. On December 31, it was estimated that goodwill of $6,000,000was impaired. In addition, a patent with an estimated usefuleconomic life of 12 years was acquired for $1,500,000 on April1.

Journalize the adjusting entry on December 31 for the impairedgoodwill.

What is goodwill?

What does it mean for goodwill to be impaired?

Journalize the adjusting entry on December 31 for theamortization of the patent rights.

Why are patents and other intangible assets amortized?

An asset was purchased for $67,000 and originally estimated tohave a useful life of 10 years with a residual value of $3,500.After two years of straight-line depreciation, it was determinedthat the remaining useful life of the asset was only 2 years with aresidual value of $1,400. a) Determine the amount of the annualdepreciation for the first two years. $ b) Determine the book valueat the end of Year 2. $ c) Determine the depreciation expense foreach of the remaining years after revision.

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in