Chevy Company bought a new technology welding machine for dollar 150,000 . Chevy

Question

Chevy Company bought a new technology welding machine for dollar 150,000 . Chevy estimate the salvage value to be $25,000 . The estimated useful of the machine is 5 years. Compute the depreciation expense for the first year. Mercedes Company bought a delivery truck to deliver the mercedes to their customers. They purchased it for $60,000 . It has a salvage value of $10,000 and a useful life of 4 years. Compute the double declining balance depreciation for the first year. Volkswagon company installs a computerized welding machine in its factory in the beginning of the year at a cost of $45,000 . The machines useful estimated life is 10 years or 420,000 units a product with a $5,000 salvage value. During the first year, the machine produces 25,000 units of product. Compute the first year of depreciation using units of production method. Lillies Flowers sells tulips for dollar 5,000 cash on May 30. The cost of the merchandise is $3,500. The sales tax law requires Lillies colect 5 percent sales tax in every dollar of merchandise sold. Record the entry for the $5,000 sale and entry to record the cost of goods sold and its applicable sales tax. Extra credit for the entry of the remittance for the sales tax. Ed's CPA Company reports their income before expense and income taxes in the amount of $3,200,000 and interest expense of 200,000. Compute the times interest earned ratio.

Explanation / Answer

15

Depreciation = asset cost - salvage value / life

= 150000 - 25000 / 5 = 25000

depreciation expense for first year = 25000

16

double declining depreciation = 2*(asset cost- salvage value)/life

   =2* ( 60000- 10000) /4 = 25000

double declining depreciation for first year = 25000

17 depreciation as per unit of production method = units produced/total units * (asset cost- salvage value)

= 25000/420000 * (45000-5000)

=2380

19. times interest earned ratio = income before expense and income tax / interest expense

= 3200000 / 200000

= 16

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.