Part 1 On January 1, Year 1, Phillips Company made a basket purchase including land, a...

Part 1

On January 1, Year 1, Phillips Company made a basket purchase including land, a building and equipment for $800,000. The appraised values of the assets are $48,000 for the land, $760,000 for the building and $112,000 for equipment. Phillips uses the double-declining-balance method of depreciation for the equipment which is estimated to have a useful life of four years and a salvage value of $10,000. The depreciation expense for Year 1 for the equipment is: (Round your intermediate percentages to 2 decimal places: ie .054231 = 5.42%.)

Part 2

On January 1, Year 1, Friedman Company purchased a truck that cost $30,000. The truck had an expected useful life of 100,000 miles over 8 years and a $7,000 salvage value. During Year 2, Friedman drove the truck 36,000 miles. The company uses the units-of-production method. The amount of depreciation expense recognized in Year 2 is: (Do not round intermediate calculations.)

Part 3

Farmer Company purchased equipment on January 1, Year 1 for $51,000. The equipment is estimated to have a 5-year life and a salvage value of $4,000. The company uses the straight-line depreciation method.

At the beginning of Year 4, Farmer revised the expected life to eight years. The annual amount of depreciation expense for each of the remaining years would be:

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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