Question
In: Accounting
Wells we are purchased two new drilling rigs for a total of $180,000 on January 1,...
Wells we are purchased two new drilling rigs for a total of
$180,000 on January 1, 2014. The company paid $40,000 cash and
signed a 4-year, 10% note for the remaining balance. The note is to
be paid in four annual end-of-year payments of $44,166 each, with
the first payment on December 31, 2014. Each payment includes
interest on the unpaid balance plus principal.
Prepare the journal entry to record the purchase of the vans.
Prepare journal entries for each of the annual payments.
a.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On January 1, 2019, Chelsea Company purchased for $180,000 a new machine that has an estimated...
On January 1, 2019, Chelsea Company purchased for $180,000 a new
machine that has an estimated useful life of ten years (or 550,000
stamping operations), after which the expected salvage value is
$10,000.
Under each of the following depreciation methods, calculate the
depreciation expense for 2019.
Please show work :)
Required:
Straight-line depreciation
Double-declining balance depreciation
Units-of-production depreciation, if 66,000 stamping operations
were made in 2019
An oil company is drilling a series of new wells on the perimeter of a producing...
An oil company is drilling a series of new wells on the
perimeter of a producing oil field. About 17% of the new wells will
be dry holes. Even if a new well strikes oil, there is still
uncertainty about the amount of oil produced: 40% of new wells that
strike oil produce only 2,200 barrels a day; 60% produce 6,200
barrels per day.
a. Forecast the annual cash revenues from a new perimeter well.
Use a future oil price...
Accelerated Depreciation Koffman's Warehouse purchased a forklift on January 1, 2017, for $180,000. The forklift is...
Accelerated Depreciation
Koffman's Warehouse purchased a forklift on January 1, 2017, for
$180,000. The forklift is expected to last for five years and have
a residual value of $11,000. Koffman's uses the
double-declining-balance method for depreciation.
Required:
1. Calculate the depreciation expense,
accumulated depreciation, and book value for each year of the
forklift's life. If necessary, round any depreciation calculations
to the nearest dollar.
Year
Annual
Depreciation
Accumulated
Depreciation
Book Value
2017
$
$
$
2018
2019
2020
2021
2....
On January 1, 2014, Courier Inc. purchased new equipment that had a total cost (including shipping...
On January 1, 2014, Courier Inc. purchased new equipment that
had a total cost (including shipping and installation) of $82,000.
The equipment is expected to have a useful life of four years or
produce a total of 122,000 units. At the end of its life, the
equipment is expected to have a residual value of $4,900. The
equipment is expected to produce 25,620 units in 2014; 32,940 units
in 2015; 34,160 units in 2016; and 29,280 units in 2017. Courier...
On January 1, 2014, Courier Inc. purchased new equipment that had a total cost (including shipping...
On January 1, 2014, Courier Inc. purchased new equipment that
had a total cost (including shipping and installation) of $83,000.
The equipment is expected to have a useful life of four years or
produce a total of 123,000 units. At the end of its life, the
equipment is expected to have a residual value of $4,300. The
equipment is expected to produce 22,140 units in 2014; 31,980 units
in 2015; 31,980 units in 2016; and 36,900 units in 2017. Courier...
Palmetto Ag. Inc. recently purchased a new harvester. The new machine cost $180,000 and it is...
Palmetto Ag. Inc. recently purchased a new harvester. The new
machine cost $180,000 and it is expected to generate net after-tax
operating cash flows, including depreciation, of $50,000 per year.
The machine has a five year expected life. The expected salvage
values after-tax adjustments for the machine are given below, and
the company’s WACC is 11%. Based on the information below, should
the firm operate the machine until the end of its 5 year physical
life? If not, then when...
Wildhorse Ltd. purchased a new machine on April 4, 2017, at a cost of $180,000. The...
Wildhorse Ltd. purchased a new machine on April 4, 2017, at a
cost of $180,000. The company estimated that the machine would have
a residual value of $18,000. The machine is expected to be used for
12,960 working hours during its four-year life. Actual machine
usage was 1,300 hours in 2017; 1,900 hours in 2018; 2,500 hours in
2019; 1,900 hours in 2020; and 2,100 hours in 2021. Wildhorse has a
December 31 year end.
(a)
Calculate depreciation for the...
1. A company purchased and installed a machine on January 1, 2012, at a total cost...
1. A company purchased and installed a machine on January 1,
2012, at a total cost of $108,500. Straight-line depreciation was
calculated based on the assumption of a seven-year life and no
salvage value. The machine was disposed of on April 1, 2016.
(25 Points)
a. Prepare the general journal entry to update depreciation to
April 1, 2016.
b. Prepare the general journal entry to record the disposal of the
machine under each of these three independent situations:
(1) The...
. A company purchased and installed a machine on January 1, 2012, at a total cost...
. A company purchased and installed a machine on January 1,
2012, at a total cost of $108,500. Straight-line depreciation was
calculated based on the assumption of a seven-year life and no
salvage value. The machine was disposed of on April 1, 2016.
(25 Points)
a. Prepare the general journal entry to update depreciation to
April 1, 2016.
b. Prepare the general journal entry to record the disposal of the
machine under each of these three independent situations:
(1) The...
Wells Printing is considering the purchase of a new printing press. The total installed cost of...
Wells Printing is considering the purchase of a new printing
press. The total installed cost of the press is $ 2.15 million.
This outlay would be partially offset by the sale of an existing
press. The old press has zero book value, cost $ 1.01 million 10
years ago, and can be sold currently for $ 1.29 million before
taxes. As a result of acquisition of the new press, sales in each
of the next 5 years are expected to...
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