> Continuing Problem P9-43 Calculating and journalizing partial-year depreciatio

Question

> Continuing Problem P9-43 Calculating and journalizing partial-year depreciation This problem continues the Canyon Canoe Company situation from Chapter 8. Amber and Zack Wilson are continuing to review business practices. Currendy,the are reviewing the company's properry, plant, and equipment and have gathered the following information: Estimated Acquisition Estimated Residual Depreciation Depreciation Cost LifeValue Method Expense $ 100 Asset Date Canoes Land Building Canoes Computer Nov. 3, 2018 $4,800 4 years $ 0 Dec. 1, 2018 Dec. 1, 2018 35,000 5 years 5,000 Dec. 2, 2018 Mar. 2, 2019 SL n/a SL SL DDB SL 85,000 500 7,200 3,600 3,000 4 years 3 years 5 years 0 300 600 150 Office Furniture Mar. 3, 2019 *SL Straight-line; DDB Double-declining-balance Requirements 1. Calculate the amount of monthly depreciation expense for the computer and office furniture for 2019. 2. For each asset, determine the book value as of December 31, 2018. Then, calcu- late the depreciation expense for the first six months of 2019 and the book value as of June 30, 2019. Prepare a partial balance sheet showing Property, Plant, and Equipment as of June 30, 2019. 3.

Explanation / Answer

Requirement 1 Office Furniture Calculation of amount of Depreciation expense Straight-line method =(3000-600)/5 Years 480 Monthly depreciation =480/12 40 Computer Double Declining Balance method Straight-line depreication rate (1/3%) 33% Accelared depreciation (33.333*200%) 67% Year Book value of the asset at the start of the year Rate of declining Blance Depreciation expense Accumuluted depreciation Book Value of asset at the end of the year 1 3600 67% 2000 2000 1600 2 1600 67% 1067 3067 533 3 533 67% 133 3200 400 Monthly depreication for the computer for the year 2019 =2000/10 200 Requirement 2 Book Value of the asset as of December 31, 2018 Asset Cost Depreciation for 2018 Book Value as of December 31, 2018 Depreciation for first six months of 2019 Book Value as of June 30, 2019 Canoes 4800 200 4600 600 4000 Land 85000 NA 85000 Building 35000 500 34500 3000 31500 Canoes 7200 150 7050 900 6150 Computer 3600 0 3600 800 2800 Office Furniture 3000 0 3000 160 2840 Requirement 3 Partial balance sheet as of June 30, 2019 Property, Plant and Equipment Land 85000 Canoes 12000 Less : Accumulated Depreication 1850 10150 Building 35000 Less : Accumulated Depreication 3500 31500 Computer 3600 Less : Accumulated Depreication 800 2800 Office Furniture 3000 Less : Accumulated Depreication 160 2840 Total property Plant and equipment 132290

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