Problem 3 Worth 8 pts. –1/2 pt. for each calculation amount for annual depreciat
ID: 2489522 • Letter: P
Question
Problem 3 Worth 8 pts. –1/2 pt. for each calculation amount for annual depreciation and book value. ½ for each account title—only take off total of 1 pt. for acct. titles On January 1, 2013, Dominquez Inc. purchased equipment at a cost of $300,000. The equipment has an estimated salvage value of $20,000. The equipment has an estimated useful life of ten years or 140,000 units. The actual units of product produced during 2013 and 2014 were 15,000 and 16,000, respectively. Required Make sure you show your calculations Prepare the journal entries to record depreciation for 2013 and 2014 using each of the following depreciation methods: 1. Straight-line Depreciation 2. Double-Declining-balance method of depreciation 3. Units-of-production Depreciation 4. Calculate the book value at the end of 2013 and 2014 under all 3 methods. Solution: Date Account Debit Credit Straight-line Year 2013 Straight-line Year 2014 Double-Declining 2013 Double-Declining 2014 Units of Production 2013 Units of Production 2014 #4 Calculate Book Value 2013 2014 Straight-line Double-Declining Units of Production Problem 3 Worth 8 pts. –1/2 pt. for each calculation amount for annual depreciation and book value. ½ for each account title—only take off total of 1 pt. for acct. titles On January 1, 2013, Dominquez Inc. purchased equipment at a cost of $300,000. The equipment has an estimated salvage value of $20,000. The equipment has an estimated useful life of ten years or 140,000 units. The actual units of product produced during 2013 and 2014 were 15,000 and 16,000, respectively. Required Make sure you show your calculations Prepare the journal entries to record depreciation for 2013 and 2014 using each of the following depreciation methods: 1. Straight-line Depreciation 2. Double-Declining-balance method of depreciation 3. Units-of-production Depreciation 4. Calculate the book value at the end of 2013 and 2014 under all 3 methods. Solution: Date Account Debit Credit Straight-line Year 2013 Straight-line Year 2014 Double-Declining 2013 Double-Declining 2014 Units of Production 2013 Units of Production 2014 #4 Calculate Book Value 2013 2014 Straight-line Double-Declining Units of ProductionExplanation / Answer
Answer:SLM
2013 Depreciation expense A/C dr. $28000
To Accumulated dep -Equipment A/C $28000
2014
Depreciation expense A/C dr. $28000
To Accumulated dep -Equipment A/C $28000
Double-Declining: Useful life = 10 years --> Straight line depreciation rate = 1/10 = 10% per year
2013
Depreciation expense A/C dr. $60000
To Accumulated dep -Equipment A/C $60000
2014
Depreciation expense A/C dr. $48000
To Accumulated dep -Equipment A/C $48000
Units of Production:
2013
Depreciation expense A/C dr. $30000
To Accumulated dep -Equipment A/C $30000
2014
Depreciation expense A/C dr. $32000
To Accumulated dep -Equipment A/C $32000
Answer:
Units of Production 270000 238000
Book value 2013 2014 SLM 272000 244000 DDM 240000 192000Related Questions
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