Question
In: Accounting
Utley Corp purchased a new truck on January 1, 2013. The truck cost $30,000, has an...
Utley Corp purchased a new truck on January 1, 2013. The truck cost $30,000, has an estimated life of eight years, and has an estimated residual value of $6,000. Utley Corp uses the double-declining-balance method to compute depreciation.
14.value: 3.00 pointsRequired information What is Utley Corp's adjusted balance in its Accumulated Depreciation account at the end of 2014?
$13,125.
$3,750
$11,250.
$1,875
Solutions
Expert Solution
$13,125
Working:
| a. | Straight line rate | = | 1/8 | = | 12.50% | |||||||||
| Double declinig rate | = | 2*12.5% | = | 25.00% | ||||||||||
| b. | Depreciation Schedule: | |||||||||||||
| Year | Beginning Book Value | Depreciation rate | Depreciation Expense | Ending Book Value | ||||||||||
| a | b | c=a*b | d=a-c | |||||||||||
| 2013 | $ 30,000 | 25.00% | $ 7,500 | $ 22,500 | ||||||||||
| 2014 | $ 22,500 | 25.00% | $ 5,625 | $ 16,875 | ||||||||||
| c. | ||||||||||||||
| Calculation of Accumulated depreciation: | ||||||||||||||
| Year | Beginning Accumulated depreciation | Depreciation Expense | Ending Accumulated depreciation | |||||||||||
| 2013 | 0 | $ 7,500 | $ 7,500 | |||||||||||
| 2014 | $ 7,500 | $ 5,625 | $ 13,125 | |||||||||||
ekkarill92 answered 1 year agoRelated Solutions
1. H Corp recently purchased a new delivery truck. The new truck has a cost of...
1. H Corp recently purchased a new delivery truck. The new truck
has a cost of $56250 and is expected to generate after tax cash
flows including depreciation of $15625 per year. The truck has a
five year expected life. The expected year end abandonment Values
(Salvage Value after tax adjustments) for the truck are given
below. The company’s cost of capital is 11%
Year
Annual operating CF Abandonment Value
0
(56250)
----
1
15,625
43750
2
15,625
35000
3 ...
PART B (Schedule 2): On January 1, 2013, Border Company purchased a truck that cost $17,000....
PART B (Schedule 2): On January 1, 2013, Border Company
purchased a truck that cost $17,000. The company signed a $17,000
notes payable that specified four equal annual payments (at each
year-end), each of which includes a repayment of the principal and
interest on the unpaid balance at 10% per annum. The company
estimates the useful life of 10 years with zero residual value for
the truck. Round up to the nearest dollar.
1. Calculate the amount of each equal...
ABC Delivery Company purchased a new delivery truck on January 1 with an original cost of...
ABC Delivery Company purchased a new delivery truck on January 1
with an original cost of $50,000. The company estimates it will use
the truck for 5 years and drive a total of 100,000 miles. It plans
to sell the truck at the end of the five years for $5,000. During
the first year, the truck was driven 15,000 miles. What is the
depreciation for the first year using the
DoubleDeclining Balance
method?
$10,000
$18,000
$7,500
$20,000
$6,750
$9,000
On January 1, 2019, Rowley Company purchased a truck that cost $55,000. The truck had an...
On January 1, 2019, Rowley Company purchased a truck that cost
$55,000. The truck had an expected useful life of 5 years and a
$5,000 salvage value. The amount of depreciation expense on the
2019 Income Statement assuming that Rowley uses the straight line
method is:
Group of answer choices
$10,000
$11,000
$5,000
None of these
2.
On January 1, 2018, Rowley Company purchased a truck that cost
$50,000. The truck had an expected useful life of 5 years and...
Ram Corporation purchased a new truck on January 1, 2020 for $50,000. The truck is expected to...
Ram Corporation purchased a new truck on January 1, 2020 for
$50,000. The truck is expected to last five years with a
residual value of $10,000. Using straight-line
depreciation, show the effect on the income statement and balance
sheet of this transaction over the next five years.
Income statement
2020 2021 2022 2023 2024
Depreciation
expense $8000 $8000 $8000 $8000 $8000
Balance Sheet
2020 2021 2022 2023 2024
Equipment $ $ $ $ $
Less: accumulated
Depreciation ( ) ( ) ( ) ( ) ( )
Book
value $ $ $ $ $
Part II – Chapter 8
Company
A Company
B Company
C
Days sales in
receivables 8.3
days 39.9
days 60.3
days
Days sales in
inventory 2.3...
Digger Corp has a patent that was purchased on 1/1/17 for $30,000. The patent has a...
Digger Corp has a patent that was purchased on 1/1/17 for
$30,000. The patent has a 15-year useful life, no salvage value,
and has been appropriately amortized at $2,000 a year for the past
3 years. On 1/1/20, Digger incurred $15,600 in legal
fees to successfully defend the patent. If Digger estimate of
patent's useful life and salvage value have not changed, how much
amortization expense should Digger record for the patent in
2020?
Select one:
$2,640
$3,800
$3,040
$3,300
Machinery purchased for $56,000 by Eggo Corp. on January 1, 2013, was originally estimated to have...
Machinery purchased for $56,000 by Eggo Corp. on January 1,
2013, was originally estimated to have an eight-year useful life
with a residual value of $4,000. Depreciation has been entered for
five years on this basis. In 2018, it is determined that the total
estimated useful life (including 2018) should have been 10 years,
with a residual value of $4,500 at the end of that time. Assume
straight-line depreciation and that Eggo Corp. uses IFRS for
financial statement purposes.
Required...
Skysong, Inc. purchased a delivery truck for $32,400 on January 1, 2019. The truck has an...
Skysong, Inc. purchased a delivery truck for $32,400 on January
1, 2019. The truck has an expected salvage value of $2,400, and is
expected to be driven 100,000 miles over its estimated useful life
of 8 years. Actual miles driven were 15,700 in 2019 and 12,900 in
2020.
Compute depreciation expense for 2019 and 2020 using (1) the
straight-line method, (2) the units-of-activity method, and (3) the
double-declining-balance method. (Round depreciable
cost per unit to 2 decimal places, e.g. 0.50...
On January 1, Town Spa Pizza purchased a delivery truck for $36,000. The truck has an...
On January 1, Town Spa Pizza purchased a delivery truck for
$36,000. The truck has an estimated useful life of 10 years or
140,000 miles and an estimated residual value of $8,000. Town Spa’s
fiscal year is the calendar year. Calculate the amounts requested
below.
1)Depreciation Expense for the year, using the production
method. Assume 22,000 miles were driven this year:
A) $4,400
B) $5,657
C)2,800
D)3,600
2)The total accumulated depreciation after the truck has been
used for 5 years,...
Swifty Company purchased a delivery truck for $26,000 on January 1, 2020. The truck has an...
Swifty Company purchased a delivery truck for $26,000 on January
1, 2020. The truck has an expected salvage value of $1,000, and is
expected to be driven 100,000 miles over its estimated useful life
of 10 years. Actual miles driven were 12,800 in 2020 and 12,000 in
2021.
Calculate depreciation expense per mile under units-of-activity
method. (Round answer to 2 decimal places, e.g.
0.50.)
Depreciation expense
$
per mile
eTextbook and Media
List of Accounts
Compute depreciation expense for 2020...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Two point charges lie on the x axis. A charge of + 2.60 pC is at...
- What are the focuses of these two fields of psychology? How has both fields of study...
- -Why can't we be certain that the Andromeda Galaxy exists today? -How do sound and light...
- After-tax cost of debt Personal Finance Problem Bella Wans is interested in buying a new motorcycle....
- This article illustrates the political economy of international trade and the concept of comparative advantage. Explain...
- Securities firms are subject to several forms of regulation. The SEC establishes general guidelines for trading...
- Assume a loan of $30,000, 36 months, 6.5% interest. Generate a table of payments showing the...
ADVERTISEMENT