Question

In: Accounting

Module Assignment: Depreciation Exercise On January 1, 2018, Happy Hospital purchased an MRI for $8,375,000. It...

Module Assignment:

Depreciation Exercise

On January 1, 2018, Happy Hospital purchased an MRI for $8,375,000. It cost an additional $125,000 to deliver, install and calibrate the MRI. The MRI has a useful life of 5 years, at which time it is expected that it will be disposed of for a $100,000 salvage value.

Using straight-line depreciation method, prepare a schedule showing annual depreciation expense and accumulated depreciation for each of the 5 years.

Show how the asset and accumulated depreciation would appear on the balance sheet at December 31, 2018.

Prepare journal entries to record the asset’s acquisition, annual depreciation for each year and the asset’s sale for $100,000.

Year    Annual Expense          Accumulated Depr      Net asset value

2018

2019

2020

2021

2022

Property, Plant & Equipment

Less: Accumulated depreciation

Net Asset value

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Exercise 7-48 (Algorithmic) Depreciation Methods Berkshire Corporation purchased a copying machine for $9,800 on January 1,...
Exercise 7-48 (Algorithmic) Depreciation Methods Berkshire Corporation purchased a copying machine for $9,800 on January 1, 2019. The machine's residual value was $1,175 and its expected life was 5 years or 2,000,000 copies. Actual usage was 480,000 copies in the first year and 462,000 in the second year. Required: 1. Compute depreciation expense for 2019 and 2020 using the: a. Straight-line method. Depreciation expense: $fill in the blank 1 per year b. Double-declining-balance method. Depreciation Expense 2019 $fill in the...
Brief Exercise 11-7 Novak Company purchased a computer for $8,880 on January 1, 2016. Straight-line depreciation...
Brief Exercise 11-7 Novak Company purchased a computer for $8,880 on January 1, 2016. Straight-line depreciation is used, based on a 5-year life and a $1,110 salvage value. In 2018, the estimates are revised. Novak now feels the computer will be used until December 31, 2019, when it can be sold for $555. Compute the 2018 depreciation. (Round answer to 0 decimal places, e.g. 45,892.)
On January 1, 2018, Ras Alhd Corporation purchased 12% bonds dated January 1, 2018, with a...
On January 1, 2018, Ras Alhd Corporation purchased 12% bonds dated January 1, 2018, with a principal amount of OMR 120,000. The bonds mature in 2028 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. What is the price of the bonds at January 1, 2018 Select one: a. OMR 120,000 b. OMR 138,694 c. OMR 108,000 d. OMR 101,306
On January 1, 2018, Rare Bird Ltd. purchased 15% bonds dated January 1, 2018, with a...
On January 1, 2018, Rare Bird Ltd. purchased 15% bonds dated January 1, 2018, with a face amount of $28 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the price...
On January 1, 2018, Shirley Corporation purchased 12% bonds dated January 1, 2018, with a face...
On January 1, 2018, Shirley Corporation purchased 12% bonds dated January 1, 2018, with a face amount of $21 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 16%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the price of...
Depreciation Methods On January 2, 2018, Skyler, Inc. purchased a laser cutting machine to be used...
Depreciation Methods On January 2, 2018, Skyler, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 920,000 cuttings, after which it could be sold for $5,000. Required a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar): 1. Straight-line. 2....
On January 1, 2019, Happy Company purchased equipment for $114,000. The equipment was assigned a useful...
On January 1, 2019, Happy Company purchased equipment for $114,000. The equipment was assigned a useful life of 15 years and a $6,000 residual value. Happy Company will use the straight-line method to depreciate the equipment. On January 1, 2023, Happy Company revised the life of the equipment from 15 to 20 years. On January 1, 2026, Happy Company revised the life of the equipment from 20 to 12 years. On January 1, 2028, Happy Company spent $58,000 to overhaul...
On January 1, 2019, Happy Company purchased equipment for $114,000. The equipment was assigned a useful...
On January 1, 2019, Happy Company purchased equipment for $114,000. The equipment was assigned a useful life of 15 years and a $6,000 residual value. Happy Company will use the straight-line method to depreciate the equipment. On January 1, 2023, Happy Company revised the life of the equipment from 15 to 20 years. On January 1, 2026, Happy Company revised the life of the equipment from 20 to 12 years. On January 1, 2028, Happy Company spent $58,000 to overhaul...
On January 1, 2018, for $18.7 million, Cenotaph Company purchased 10% bonds, dated January 1, 2018,...
On January 1, 2018, for $18.7 million, Cenotaph Company purchased 10% bonds, dated January 1, 2018, with a face amount of $20.7 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31 . Required: 1. Prepare the journal entry to record interest on June 30, 2018, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2018, using the effective interest...
The Chicago Hope Hospital purchased a MRI machine for $5 million dollars, using a 6 year...
The Chicago Hope Hospital purchased a MRI machine for $5 million dollars, using a 6 year loan at 8% interest. a. The above MRI machine which costs 5 million comes with a service charge for an additional amount of $20,000 each year for 5 years. What is the present value of cash flows for the MRI machine (use 8% as the discount rate)? b. The salvage value of the machine is $100,000 five years from now. What is the present...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT