Question

13.

Equipment was purchased on January 5, 2011, at a cost of$90,000. The equipment had an estimated useful life of 8 years andan estimated residual value of $8,000.

After using the equipment for 3 years, the useful life was revisedto a total of 10 years and the residual value was reduced to$2,004.

Determine the straight-line depreciation expense for the year 2014and following years.

14. Machinery acquired at a cost of $80,000 and on whichthere is accumulated depreciation of $55,000 (includingdepreciation for the current year to date) is exchanged for similarmachinery. For financial reporting purposes, present entries torecord the disposition of the old machinery and the acquisition ofnew machinery under each of the following assumptions:

(a)	Price of new, $120,000; trade-in allowance on old, $4,000;balance paid in cash.
(b)	Price of new, $120,000; trade-in allowance on old, $34,000;balance paid in cash.

15.

Machinery is purchased on July 1 of the current fiscal yearfor $240,000. It is expected to have a useful life of 4 years, or25,000 operating hours, and a residual value of $15,000. Computethe depreciation for the last six months of the current fiscal yearending December 31 by each of the following methods:

(a)	straight-line
(b)	declining-balance at twice the straight-linerate
(c)	units-of-production (used for 1,600 hours during thecurrent year)

(Round the answer to the nearestdollar.)