HW Problem 8. expected life of 4 1 - Copy Company purchased a new photocopier fo

Question

HW Problem 8. expected life of 4 1 - Copy Company purchased a new photocopier for $85,000 on I/1/X1. The copier has an years or 2,000,000 copies, and an expected salvage value of S5,000. Calculate the annual i Assume that 450,000 copies were made in 20x1. 600,000 in 20x2, 700,000 in 20x3, 00,000 in 20X4. Be sure to show your work. When you're done, enter in the annual depreciation into ation over the life of the new copier using the straight-line, double-declining balance, and units of the following table. DDB Year Straight-LineUnits Total HW Problem 8.2- On April 1, Tori Company made a group purchase from a company going out of business. It paid $400,000 for the following items which were appraised at the following values: Building Land Land Improvements Equipment 260,000 120,000 40,000 80,000 $500,000 a. Record the journal entry for the purchase on April I b. Calculate the amount of depreciation on the building for the first and second years assuming the c. Calculate the amount of deprec d. Calculate the amount of depreciation for the first and second years on the equipment assuming the double-declining balance method, a life of 40 years, and salvage value of $20,000. (Show calculations.) a 20 year life, the straight-line method, and a salvage value of $4,000. (Show your calculations.) units of production method, a life of 32,000 machine hours, and a salvage value of $8,000. The iation on the land improvements for the first and second years assuming equi pment was used 5,000 machine hours in the first year and 10,000 machine hours in the second year. (Show your calculations.) HW Problem 8.3-On /X Your Co. purchased equipment on account for $105,000 plus sales taxs of $9,000. On January 2d Your Co. paid $2,000 to reinforce the floor where the equipment would be installed. On January 3"d Your Co. paid $1,200 for delivery and installation of the equipment. A) Record the journal entries for the preceding transactions. B) Record depreciation at the end of the year assuming the straight-line method, an 11 year life, and a salvage value of $5,000. C) Record the journal entries 10/1/X4, if Your Co. sells the equipment for $90,000. Assume no previous adjusting entries were made in 20X4. D) Record the journal entries 10/1/X4 if the equipment was sold for $60,000.

Explanation / Answer

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year straight line units DDB 1 20,000 18,000 42,500 2 20,000 24,000 21,250 3 20,000 28,000 10,625 4 20,000 16,000 5,312.50 Total 80,000 86,000 79,687.50 Straight line mrthod depreciation per year = cost - salvage -value /(expected life )                                              =$850,000-5000/(4 years)                         =$85,000-5000/(4 years)                                              =                        = $20,000 per year note ; in case of straight line method fixed amount of depreciation charged throghout the life of asset. At the end of life the cost will be zero. Units method Depreciation = cost - salvage value /(total copies ) *copies in a year depreciation in year 1   = $85,000-5000/(2,000,000)*450,000 = 18,000 2 =$85,000-5000/(2,000,000)*600,000 = 24000 3 =$85,000-5000/(2,000,000)*700,000 = 28000 4 =$85,000-5000/(2,000,000)*400,000 = 16000 Double declaining balance Depreciation = 2* depreciation rate * cost at the beginning of year Depreciation in year Year Opening Balance Depreciation (%) Depreciation Closing Balance 1 85000 50% 42500 42500 2 42500 50% 21250 21250 3 21250 50% 10625 10625 4 10625 50% 5312.5 5312.5 79687.5 Note: Depreciation rate is equal to 2*(1/4)*100 in case of double declaining method we double the depreciation rate

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