HW Problem 8. expected life of 4 1 - Copy Company purchased a new photocopier fo
ID: 2401460 • Letter: H
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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
a)
Dr Building 260,000
Dr land 120,000
Dr land improvement 40,000
Dr equipment 80,000
Cr cash 400,000
Cr capital reserve 100,000
[bieng purchased business with 400,000 cash and balancing figure transfered to capital reserve.]
b)
depreciation in first year = $260,000*5% = $13,000
depreciation in second year =$247,000*5% = $12,350
[in case of declaining method we calculate each years depreciation using the net book value of asset but in case of straight line constant depreciation is charged ]
calculations ;
depreciation = 2* depreciation rate *cost
depreciation rate = 1/40 yeras * 100 = 5%
c)
depreciation per year = $40,000-4,000/(20 years ) = 1800 per year
calculation ;
depreciation =cost - salvage value / (life of asset)
[in straight line method constant depreciation is for every year , so in this case $1800 is same for first year and second year ]
d)
depreciation for first year = $80,000 - 8,000 /(32,000 hours )* 5,000 hours = $11,250
depreciation for second year = $ 80,000-8000/ (32,000 hours) *10,000 hours =$22,500
calculation ;
depreciation = cost - salvage value /(capacity in lifetime )* capacity in years.
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