Question

In: Accounting

On January 1, 2020, LMB, Inc. purchased some equipment for $42,000. In order to prepare the...

On January 1, 2020, LMB, Inc. purchased some equipment for $42,000. In order to prepare the equipment for use, LMB had to pay $8,000 to have the equipment installed. LMB aos estimates that the equipment will be used for 5 years and that it can be sold to a smaller company for parts after 5 years. It expects to sell the parts for $5,000. LMB will use the equipment for 5 years but also estimates that it will produce 10,000 units in total during that time.

LMB's units of production were as follows:

2020: 2,000 units

2021: 4,000 units

2022: 2,000 units

2023: 1,500 units

2024: 500 units

Using the Units of Production method, calculate depreciation expense for the year ended December 31, 2020 (first blank) and for the year ended December 31, 2021 (second blank).  

In the third blank, fill in the total accumulated depreciation after the 2nd year (12/31/2020).

In the fourth blank, fill in the net book value of the equipment on 12/31/2021.

Question 11 options:

Blank # 1
Blank # 2
Blank # 3
Blank # 4

Solutions

Expert Solution


Related Solutions

On January 1, 2020, Betty DeRose, Inc. purchased equipment for $95,000. The equipment was assigned an...
On January 1, 2020, Betty DeRose, Inc. purchased equipment for $95,000. The equipment was assigned an estimated useful life of 15 years and a salvage value of $15,200. On January 1, 2024, Betty DeRose decided the life of the equipment should be changed from 15 to 25 years with a salvage value of $8,200 at the end of the 25 years. Betty DeRose uses the straight-line depreciation method to calculate depreciation on its assets. Calculate the book value of the...
On january 1, 2015, Equipment costing $100,000 was purchased. Depreciation of $42,000 was taken for 2015....
On january 1, 2015, Equipment costing $100,000 was purchased. Depreciation of $42,000 was taken for 2015. On december 31st the equipment was sold for $50,000. prepare the journal entries to record the purchase, depreciation and sale transactions.
On 1 January 2006, Norris Company purchased equipment for $42,000. Norris also paid $1,200 for shipping...
On 1 January 2006, Norris Company purchased equipment for $42,000. Norris also paid $1,200 for shipping and installation. The equipment is expected to have a useful life of 10 years and a salvage value of $3,200. (a) Calculate the depreciation expense for the years 2006 through 2008, using the straight-line method. (b) Calculate the depreciation expense for the years 2006 through 2008, using the double- declining balance method. (c) What is the book value of the equipment at the end...
Trainex Corporation purchased equipment on January 1, 2020 at a cost of $500,000. The equipment has...
Trainex Corporation purchased equipment on January 1, 2020 at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years. At the end of two years, Trainex reevaluated the useful life of the equipment. Management extended the total useful life an additional 5 years but estimated that the equipment would have no residual value at the end of this time. If the company uses straight-line depreciation, what amount (in whole dollars)...
Trainor Corporation purchased equipment on January 1, 2020, at a cost of $500,000. The equipment has...
Trainor Corporation purchased equipment on January 1, 2020, at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years. At the end of two years, Trainor revaluated the useful life of the equipment. Management extended the total useful life an additional 5 years but estimated that the equipment would have no residual value at the end of this time. If the company uses straight-line depreciation, what amount would be recorded...
Bay Inc. purchased some new equipment on January 1, 2019, with a list price of $50,000....
Bay Inc. purchased some new equipment on January 1, 2019, with a list price of $50,000. The supplier agreed to accept a deposit of $20,000 on the date of purchase and a promissory note requiring payment of $10,000 on each December 31 for the next three years (December 31, 2019, to December 31, 2021). Bay is pleased that no interest is charged on the note since its bank would have charged 7% interest. The equipment arrived on January 5, 2019,...
Ivan Manufacturing purchased equipment and a delivery van on January 1, 2020. The equipment cost $95,000...
Ivan Manufacturing purchased equipment and a delivery van on January 1, 2020. The equipment cost $95,000 and has an estimated useful life of 8 years with a residual value of $10,000. The delivery van cost $125,000 and has an estimated life of 5 years or 200,000 kilometres and a residual value of $20,000. The delivery truck is expected to be driven 25,000 and 50,000 kilometres in 2019 and 2020, respectively. Required Ivan has decided to depreciate the equipment using either...
Shoe-production equipment is purchased on January 1, 2020. The relevant data is as follows: Equipment Cost...
Shoe-production equipment is purchased on January 1, 2020. The relevant data is as follows: Equipment Cost $10,000 Estimated residual value -1,560 Accounting periods 5 years Shoe-production equipment is purchased on January 1, 2020. The relevant data is as follows: Equipment Cost $10,000 Estimated residual value -1,560 Accounting periods 5 years Units produced 38,000 shoes first year units produced are : 7000 CAD first year units produced are : 5000 CAD first year units produced are : 7000 CAD first year...
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The equipment is expected to...
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The equipment is expected to produce 25,000 units over it's useful life. The equipment cost $520,000. Units produced: Other IMPORTANT information: 2018 3000 Fair value at: 2019 3200 31-Dec-20 $       306,500 2020 3800 2021 4300 Balance in Revaluation Surplus: $            1,375 2022 3700 2023 3600 2024 3600 REQUIRED: Prepare all necessary journal entries at: 01-Jan-18 31-Dec-18 31-Dec-19 31-Dec-20 The units each year is posted. This is the only information...
The cost of equipment purchased by Waterway, Inc., on June 1, 2020, is $102,900. It is...
The cost of equipment purchased by Waterway, Inc., on June 1, 2020, is $102,900. It is estimated that the machine will have a $10,500 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 46,200, and its total production is estimated at 616,000 units. During 2020, the machine was operated 7,200 hours and produced 66,000 units. During 2021, the machine was operated 6,600 hours and produced...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT