PROBLEM FOUR - DEPRECIATION Borel Inc., a calendar year company, purchased a large truck for transporting...

PROBLEM FOUR - DEPRECIATION

Borel Inc., a calendar year company, purchased a large truck for transporting racehorses. The cost of the trailer was $200,000 and was purchased on March 31, 2018. The dealer stated the truck would provide 10 good years with $20,000 in salvage value. What would be the depreciation expense during the first three years of ownership if Borel Inc. adopted the following depreciation methods: Straight Line; sum-of-the-years digits; and Double Declining Balance?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Question 2: Revised depreciation – betterment Nova Scotia Telecom Company had a truck that was purchased...

Question 2: Revised depreciation – betterment Nova Scotia Telecom Company had a truck that was purchased on July 7, 2018, for $36000. The PPE subledger shows the following information regarding the truck: A customized tool carrier was constructed and permanently fitted to the truck on July 3, 2020 at a cost of $9600 cash. The tool carrier adds to the economic value of the truck. It will be used for the truck’s remaining life and have a zero-residual value. The...

Depreciation for Partial Periods Chambers Delivery Company purchased a new delivery truck for $46,200 on April...

Depreciation for Partial Periods Chambers Delivery Company purchased a new delivery truck for $46,200 on April 1, 2016. The truck is expected to have a service life of 10 years or 130,800 miles and a residual value of $4,680. The truck was driven 9,700 miles in 2016 and 13,400 miles in 2017. Chambers computes depreciation to the nearest whole month. Required: Compute depreciation expense for 2016 and 2017 using the For interim computations, carry amounts out to two decimal places....

Depreciation for Partial Periods Storm Delivery Company purchased a new delivery truck for $66,000 on April...

Depreciation for Partial Periods Storm Delivery Company purchased a new delivery truck for $66,000 on April 1, 2019. The truck is expected to have a service life of 5 years or 90,000 miles and a residual value of $3,000. The truck was driven 12,000 miles in 2019 and 14,000 miles in 2020. Storm computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.)...

Depreciation for Partial Periods Clifford Delivery Company purchased a new delivery truck for $54,600 on April...

Depreciation for Partial Periods Clifford Delivery Company purchased a new delivery truck for $54,600 on April 1, 2016. The truck is expected to have a service life of 10 years or 109,200 miles and a residual value of $4,800. The truck was driven 11,300 miles in 2016 and 12,700 miles in 2017. Clifford computes depreciation to the nearest whole month. Required: Compute depreciation expense for 2016 and 2017 using the For interim computations, carry amounts out to two decimal places....

Depreciation for Partial Periods Bar Delivery Company purchased a new delivery truck for $52,200 on April...

Depreciation for Partial Periods Bar Delivery Company purchased a new delivery truck for $52,200 on April 1, 2016. The truck is expected to have a service life of 10 years or 144,000 miles and a residual value of $1,920. The truck was driven 9,200 miles in 2016 and 11,300 miles in 2017. Bar computes depreciation to the nearest whole month. Required: Compute depreciation expense for 2016 and 2017 using the For interim computations, carry amounts out to two decimal places....

Depreciation for Partial Periods Bar Delivery Company purchased a new delivery truck for $36,000 on April...

Depreciation for Partial Periods Bar Delivery Company purchased a new delivery truck for $36,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 180,000 miles and a residual value of $3,000. The truck was driven 12,000 miles in 2019 and 16,000 miles in 2020. Bar computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.)...

Straight-Line Depreciation Irons Delivery Inc. purchased a new delivery truck for $42,000 on January 1, 2019....

Straight-Line Depreciation Irons Delivery Inc. purchased a new delivery truck for $42,000 on January 1, 2019. The truck is expected to have a $2,020 residual value at the end of its 5-year useful life. Irons uses the straight-line method of depreciation. Required: Prepare the journal entry to record depreciation expense for 2019 and 2020. 2019 Dec. 31 Depreciation Expense Accumulated Depreciation (Record straight-line depreciation expense) 2020 Dec. 31 Depreciation Expense Accumulated Depreciation (Record straight-line depreciation expense)

Units-of-Production Depreciation Irons Delivery Inc. purchased a new delivery truck for $42,000 on January 1, 2019....

Units-of-Production Depreciation Irons Delivery Inc. purchased a new delivery truck for $42,000 on January 1, 2019. The truck is expected to have a $2,000 residual value at the end of its 5-year useful life. Irons uses the units-of-production method of depreciation. Irons expects the truck to run for 150,000 miles. The actual miles driven in 2019 and 2020 were 40,000 and 36,000, respectively. Required: Prepare the journal entry to record depreciation expense for 2019 and 2020. Round your answers to...

Your company has purchased a large new truck-tractor for over the road use. It has a...

Your company has purchased a large new truck-tractor for over the road use. It has a cost basis of $209,697. Its MV at the end of 18 years is estimated as $1,271. Assume it will be depreciated using DDB method and the depreciation period is 18 years. What is the depreciation payment in year 4?

Finx, Inc., purchased a truck for $35,000. The truck is expectedto be driven 15,000 miles...

Finx, Inc., purchased a truck for $35,000. The truck is expected to be driven 15,000 miles per year over a five-year period and then sold for approximately $5,000. Determine depreciation for the first year of the truck’s useful life by the straight-line.

Subjects