Question
In: Accounting
On January 5, 2018 Calvin's Cropcrushers, Inc. purchased crop crushing equipment for which the following information...
| On January 5, 2018 Calvin's Cropcrushers, Inc. purchased crop | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| crushing equipment for which the following information is available: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Original cost.................. | $3,800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Estimated residual value....... | $200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Useful life in years........... | 10 | years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Useful life expressed in operating hours | 20,000 | hours | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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Solutions
Expert Solution
Answer:
Units of Output method
Depreciation under Units of Output method
= [(Cost of the asset - Salvage Value) / Total hours can be used] * Actual hours used during the year
17. Accumulated Depreciation at December 31,2019
Accumulated Depreciation at December 31,2019
= Depreciation for 2018 + Depreciation for 2019
Depreciation for 2018 = [($3,800,000 - $200,000) / 20,000] * 2,900 = ($3,600,000 / 20,000) * 2,900 = $522,000
Depreciation for 2019 = [($3,800,000 - $200,000) / 20,000] * 2,700 = ($3,600,000 / 20,000) * 2,700 = $486,000
Accumulated Depreciation at December 31,2019
= $522,000 + $486,000
= $1,008,000
18. Book value of equipment on December 31,2019
Book value of equipment on December 31,2019
= Cost of the asset - Accumulated Depreciation on December 31,2019
= $3,800,000 - $1,008,000
= $2,792,000
19. Depreciation for year 2020
The equipment is operated for 2,300 hours. The equipment is sold on September 30,2020.
Depreciation for 2020 = [($3,800,000 - $200,000) / 20,000] * 2,300 = ($3,600,000 / 20,000) * 2,300 = $414,000
20. Book Value as on September 30,2020
Book value of equipment on September 30,2020
= Book value of equipment on December 31,2019 - Depreciation for 2020
= $2,792,000 - $414,000
= $2,378,000
ekkarill92 answered 2 years agoRelated Solutions
On January 5, 2018 Calvin's Cropcrushers, Inc. purchased crop crushing equipment for which the following information...
On January 5, 2018 Calvin's Cropcrushers, Inc. purchased
crop
crushing equipment for which the following information is
available:
Original cost..................
$3,800,000
Estimated residual value.......
$200,000
Useful life in years...........
10
years
Useful life expressed in operating hours
20,000
hours
14
The accumulated depreciation at December 31, 2019 (end
of
second year) if sum of the years digits is
used
15
The book value of the equipment on December 31,
2019
assuming sum of the years digits is used.
16
The...
On January 5, 2018 Calvin's Cropcrushers, Inc. purchased crop crushing equipment for which the following information...
On January 5, 2018 Calvin's Cropcrushers, Inc. purchased
crop
crushing equipment for which the following information is
available:
Original cost..................
$3,800,000
Estimated residual value.......
$200,000
Useful life in years...........
10
years
Useful life expressed in operating hours
20,000
hours
8
The SECOND year (2019) depreciation if double declining
balance is used.
9
The accumulated depreciation at December 31, 2019 (end
of
second year) if double declining balance (DDB) is
used.
10
The book value of the equipment on December 31,...
Calvin's Cropcrushers, Inc. On January 5, 2018 Calvin's Cropcrushers, Inc. purchased crop crushing equipment for which...
Calvin's Cropcrushers, Inc.
On January 5, 2018 Calvin's Cropcrushers, Inc. purchased
crop
crushing equipment for which the following information is
available:
Original cost..................
$3,800,000
Estimated residual value.......
$200,000
Useful life in years...........
10
years
Useful life expressed in operating hours
20,000
hours
Calculate the following
1
The depreciable base.
2
The annual depreciation using the straight line
method.
3
The accumulated depreciation at December 31, 2019 (end
of
second year) if straight line (S/L) depreciation is
used.
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The equipment is expected to...
On January 1, 2018, Aylmer Inc purchased a piece of equipment. The
equipment is expected to
produce
25,000 units over it's useful life. The equipment cost
$520,000.
Units
produced:
Other
IMPORTANT information:
2018
3000
Fair
value at:
2019
3200
31-Dec-20
$ 306,500
2020
3800
2021
4300
Balance
in Revaluation Surplus:
$
1,375
2022
3700
2023
3600
2024
3600
REQUIRED:
Prepare
all necessary journal entries at:
01-Jan-18
31-Dec-18
31-Dec-19
31-Dec-20
The units each year is posted. This is the only information...
Maple Inc. owns equipment that it purchased on January 1, 2018 for $4 Million. The following...
Maple Inc. owns equipment that it purchased on January 1, 2018
for $4 Million.
The following additional information is available:
Depreciation: 10-year useful life, straight line basis, no
residual.
Dec 31, 2018 – Book value (after recording 2018 depreciation):
$3,600,000
Dec 31, 2018 – Fair value: $4,500,000
Dec 31, 2019 – Fair value $3,000,000
The company uses the revaluation model (asset adjustment method)
to account for its property, plant and equipment.
Instructions
Assuming the entry for the current year's depreciation...
Bolton, Inc. purchased equipment for $87,000 on January 1, 2018. The equipment is expected to have...
Bolton, Inc. purchased equipment for $87,000 on January 1,
2018. The equipment is expected to have a
five-year life and a residual value of $7,800.
Using the double-declining balance method, depreciation for
2019 would be:
On January 1, 2018, Betty DeRose, Inc. purchased equipment for $95,000. The equipment was assigned an...
On January 1, 2018, Betty DeRose, Inc. purchased equipment for
$95,000. The equipment
was assigned an estimated life of 15 years and a salvage value of
$12,500. On
January 1, 2021, Betty DeRose decided the life of the equipment
should be changed from
15 to 25 years with a salvage value of $5,900 at the end of the 25
years. Betty DeRose
uses the straight-line method to depreciate its
assets.
Calculate the book value of the equipment at December
31,...
Stahn Inc., an oil production company, purchased a machine on January 1, 2018. The following information...
Stahn Inc., an oil production company, purchased a machine on
January 1, 2018. The following information applies:
Cost
Estimated useful life
Residual value
$40,000
3 years
$4,000
The year-end of the company is December 31.
Required:
1.
Calculate the depreciation expense and the carrying amount at
year-end for the three-year period using the straight-line and
double-declining balance methods.
2.
Assume depreciation has been recorded using the double-declining
balance method. The machine is obsolete at the end of two years and...
Novak Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service life, 5...
Novak Cole Inc. acquired the following assets in January of
2018.
Equipment, estimated service life, 5 years; salvage value,
$15,700
$486,700
Building, estimated service life, 30 years; no salvage
value
$711,000
The equipment has been depreciated using the
sum-of-the-years’-digits method for the first 3 years for financial
reporting purposes. In 2021, the company decided to change the
method of computing depreciation to the straight-line method for
the equipment, but no change was made in the estimated service life
or salvage...
Pina Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service life, 5...
Pina Cole Inc. acquired the following assets in January of
2018.
Equipment, estimated service life, 5 years; salvage value,
$15,200
$525,200
Building, estimated service life, 30 years; no salvage
value
$693,000
The equipment has been depreciated using the
sum-of-the-years’-digits method for the first 3 years for financial
reporting purposes. In 2021, the company decided to change the
method of computing depreciation to the straight-line method for
the equipment, but no change was made in the estimated service life
or salvage...
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