Problem!5 Jazmine & Juanita LLC a manufacturer of nano technology products began
ID: 2594353 • Letter: P
Question
Problem!5 Jazmine & Juanita LLC a manufacturer of nano technology products began business operation on January 1, 2016. Du Property, Plant and Equipment. Depreciation will be recorded annually on December 31. Pay attention to the dates year the following events took place regarding the purchase of Date Description Cost Useful Life Salvage Activity Basel 6 years Method of Depreciation Value s of no- 1/15/16 Land 3/31/16 Equipment 7/1/16 Machine 2/1/16 Super Computer |$100,000 [Indefinite -A record Your cholce Straight Line $72,000 250,000 120,000 hrs $10,000 Units-of-Activity $400,000-1 Syears !$20,0001 DecliningBalance-1 Additional information: ock hai to 1. During 2016 the machine was used for a total of 3000 hours 2. The land was used to grow organic vegetables for the employees of the company as part of employee health program to get lifetime harvest) of vegetables were harvested and distributed to all employees employees to eat healthier. 3000 pounds (1/5 of expected Required Complete the table below. Description Depreciation Expense Accumulated Book Value on Depreciation Land Equipment Machine Super Computer 1. As of May 31 2017, the machine was used for2400 hours. 2. On June 1, the equipment was sold for $58,389 3. The super computer crashed, required routine software updates completed on Additional information: 6/1/2017 costing $15,000. Required: What is the gain or loss on sale of the equipment.?Explanation / Answer
Solving as per US-GAAP
1) Land - Since it has an infinite life thus there will be no depreciation in the value of land.
2) Equipment - CP-SV= Depreciable value => 72000 - 2000 = 70000
Depr amt = 70000/6 *(9/12) = 8750 (Depreciable value/ useful life * proportione of the year used)
value on 31/12/16 = 72000 - 8750 = 63250
3) Machine : assuming that in a year, machine is used about 12000 hrs
Depr value = 250000 - 10000 = 240000
Depr amt = 240000/120000 * 12000 = 24000
Value on 31/12/16 = 250000- 24000 = 226000
4 ) Super Computer : Depr Value = 400000 - 20000 = 380000
Depr Rate = 100% / 5 = 20%
Depr amt = 380000 * 20% = 76000
Value on 31/3/16 = 400000 - 76000 = 324000
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