Question
In: Accounting
Part A: (6 marks) Lower Niagara Company purchased equipment in 2021 for $80,000 and estimated an...
Part A:
Lower Niagara Company purchased equipment in 2021 for $80,000 and estimated an $8,000 residual value at the end of the equipment's 10-year useful life. At December 31, 2027, there was $50,400 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2028, the equipment was sold for $21,000.
Required Part A:
Prepare the appropriate journal entries to update accumulated depreciation and then to remove the equipment from the books of Lower Niagara Company on March 31, 2028.
Part B:
Guildwood Company sold a delivery truck for $11,000. The delivery truck originally cost $25,000 in 2021 and $6,000 was spent on a major overhaul in 2027 (charged to Delivery Truck account). Accumulated Depreciation on the delivery truck to the date of disposal was $20,000, December 31, 2027.
Required Part B:
Prepare the appropriate journal entry to record the disposition of the delivery truck.
Part C:
Crenshaw Company sold office equipment that had a net book value of $4,500 for $6,000. The office equipment originally cost $15,000.
Required Part C:
Prepare the appropriate journal entry to record the disposition of the office equipment.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
6-10 A company purchased factory equipment for $250,000. It is estimated that the equipment will have...
6-10
A company purchased factory equipment for $250,000. It is
estimated that the equipment will have a $25,000 salvage value at
the end of its estimated 5-year useful life. If the company uses
the double-declining-balance method of depreciation, the amount of
annual depreciation recorded for the second year after purchase
would be
$100,000
$60,000
$90,000
$43,200
The maturity value of a $30,000, 8%, 3-month note receivable
is
$30,600
$30,240
$32,400
$30,200
The following totals for the month of April were...
On July 1, 2019, Oriole Company purchased new equipment for $80,000. Its estimated useful life was...
On July 1, 2019, Oriole Company purchased new equipment for
$80,000. Its estimated useful life was 8 years with a $8,000
salvage value. On January 1, 2022, before making its depreciation
entry for 2022, the company estimated the remaining useful life to
be 10 years beyond December 31, 2022. The new salvage value is
estimated to be $5,000. Prepare the journal entry to record
depreciation on December 31, 2019. (Credit account titles are
automatically indented when amount is entered. Do...
Pina Colada Corp. purchased equipment on January 1, 2021 for $148,500. It is estimated that the...
Pina Colada Corp. purchased equipment on January 1, 2021 for
$148,500. It is estimated that the equipment will have a $8,250
salvage value at the end of its 5-year useful life. It is also
estimated that the equipment will produce 165,000 units over its
5-year life.
Answer the following independent questions.
Compute the amount of depreciation expense for the year ended
December 31, 2021 using the straight-line method of
depreciation.
Straight-line method
$enter the depreciation expense under the straight-line method...
A company purchased equipment at the beginning of 2021 for $500,000. The equipment is depreciated on...
A company purchased equipment at the beginning of 2021 for
$500,000. The equipment is depreciated on a straight-line basis
with an estimated useful life of nine years and a $50,000 residual
value. At the beginning of 2024, the company revised the
equipment’s useful life to a total of seven years (four more years)
because of changing customer demand. The company also revised the
expected residual value to $30,000. What depreciation expense would
the company record for the year 2024 on...
Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to...
Marks Consulting purchased equipment costing $45,000
on January 1, Year 1. The equipment is estimated to have a salvage
value of $5,000 and an estimated useful life of 8 years.
Straight-line depreciation is used. If the equipment is sold on
July 1, Year 5 for $20,000, the journal entry to record the sale
will include a:
Select one:
a. Credit to loss on sale for $10,000.
b. Credit to cash for $20,000.
c. Debit to accumulated depreciation for $22,500.
d....
Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to...
Marks Consulting purchased equipment costing $45,000 on January
1, Year 1. The equipment is estimated to have a salvage value of
$5,000 and an estimated useful life of
8 years. Straight-line depreciation is used. If the equipment is
sold on July 1, Year 5 for $20,000, the journal entry to record the
sale will include a:
A) Credit to loss on sale for $10,000.
B) Debit to loss on sale for $10,000.
C) Credit to cash for $20,000.
D) Debit...
Exercise 11-6 Whispering Company purchased equipment for $256,200 on October 1, 2017. It is estimated that...
Exercise 11-6 Whispering Company purchased equipment for
$256,200 on October 1, 2017. It is estimated that the equipment
will have a useful life of 8 years and a salvage value of $14,640.
Estimated production is 39,600 units and estimated working hours
are 19,900. During 2017, Whispering uses the equipment for 530
hours and the equipment produces 1,100 units. Compute depreciation
expense under each of the following methods. Whispering is on a
calendar-year basis ending December 31. (Round rate per hour...
Exercise 11-6 Oriole Company purchased equipment for $251,090 on October 1, 2017. It is estimated that...
Exercise 11-6
Oriole Company purchased equipment for $251,090 on October 1,
2017. It is estimated that the equipment will have a useful life of
8 years and a salvage value of $14,280. Estimated production is
39,800 units and estimated working hours are 20,300. During 2017,
Oriole uses the equipment for 530 hours and the equipment produces
1,000 units.
Compute depreciation expense under each of the following methods.
Oriole is on a calendar-year basis ending December 31.
(Round rate per hour...
Exercise 11-6 Martinez Company purchased equipment for $270,000 on October 1, 2017. It is estimated that...
Exercise 11-6 Martinez Company purchased equipment for $270,000
on October 1, 2017. It is estimated that the equipment will have a
useful life of 8 years and a salvage value of $15,000. Estimated
production is 40,800 units and estimated working hours are 19,700.
During 2017, Martinez uses the equipment for 520 hours and the
equipment produces 1,000 units. Compute depreciation expense under
each of the following methods. Martinez is on a calendar-year basis
ending December 31. (Round rate per hour...
On January 1, 2021, the Allegheny Corporation purchased equipment for $343,000. The estimated service life of...
On January 1, 2021, the Allegheny Corporation purchased
equipment for $343,000. The estimated service life of the equipment
is 10 years and the estimated residual value is $24,000. The
equipment is expected to produce 296,000 units during its
life.
Required:
Calculate depreciation for 2021 and 2022 using each of the
following methods
1. Sum-of-the-years’-digits (Do not
round intermediate calculations. Round final answers to the nearest
whole dollar amount.)
2. One hundred fifty percent declining balance.
(Round final answers to the...
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