Description Please find the attached problems, 10-3A and 10-4A. Instructions for each are also att ...
Description Please find the attached problems, 10-3A and 10-4A. Instructions for each are also attached. 3 attachments Slide 1 of 3 attachment_1 attachment_1 attachment_2 attachment_2 attachment_3 attachment_3 UNFORMATTED ATTACHMENT PREVIEW Problem 10-3A Name: Section: Score: Key Code: 0% [Key code here] Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. a. StraightLine Year Depreciation Expense b. Units-ofActivity c. Double-DecliningBalance Year 1 Year 2 Year 3 Year 4 Totals Calculations: Straight-line method: For full year: (Cost ? Residual Value) / Years = Yearly Depreciation For part years: Year 1 Depreciation x Portion of Year = Depreciation Year 4 Depreciation x Portion of Year = Depreciation Units-of-activity method: (Cost ? Residual Value) / Total Hours = Rate Rate x Hours = Yearly Depreciation x Rate x Portion of Year Year 1 Year 2 Year 3 Year 4 Double-declining-balance method: Depreciable Balance = Year 1 Year 2 Year 3 Since depreciation cannot cause book value to fall below residual value: Depreciable Balance Year 4 ? Residual Value = Yearly Depreciation Yearly Depreciation Problem 10-4A Name: Section: Score: Key Code: 0% [Key code here] Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. 1. a. Straight-Line Depreciation Schedule Accumulated Depreciation Depreciation, Expense End of Year Year Book Value, End of Year Original cost 1 2 3 4 5 $ 800,000 Calculation: (Cost - Year Double-Declining-Balance Depreciation Schedule Accumulated Depreciation Depreciation, Book Value, Expense End of Year End of Year Residual Value) / Years = Yearly Depreciation b. Original cost 1 2 3 4 $ 800,000 5 Calculations: Year Depreciable Balance x Rate = Yearly Depreciation 1 2 3 4 Since depreciation cannot cause book value to fall below residual value: Year 5 2. Mar. 4 3. Mar. 4 Depreciable Balance - Residual Value = Yearly Depreciation Print Preview Page 1 of 6 Chapter 10: Long-Term Assets: Fixed and Intangible: 10-8g Problems: Series A Book Title: Accounting Printed By: Jeffery Bethel (jeffery.bethel@wayland.wbu.edu) © 2018 Cengage Learning, Cengage Learning Chapter Review 10-8g Problems: Series A PR 10-1A Allocating payments and receipts to fixed asset accounts Obj. 1 - Define, classify, and account for the cost of fixed assets. The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk. Instructions https://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 5/2/2019 Print Preview Page 2 of 6 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows: 2. Determine the amount debited to Land, Land Improvements, and Building. 3. The costs assigned to the land, which is used as a plant site, will not be depreciated, while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. 4. What would be the effect on the current year's income statement and balance sheet if the cost of filling and grading land of $12,000 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume that Land Improvements are depreciated over a 20-year life using the doubledeclining-balance method. PR 10-2A Comparing three depreciation methods Obj. 2 - Compute depreciation, using the following methods: straight-line, units-of-activity, and double-declining-balance. Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3. Instructions 1. Determine the amount of depreciation expense for the three years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. The following https://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 5/2/2019 Print Preview Page 3 of 6 columnar headings are suggested for recording the depreciation expense amounts: 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment? PR 10-3A Depreciation by three methods; partial years Obj. 2 - Compute depreciation, using the following methods: straight-line, units-of-activity, and double-declining-balance. Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours in Year 4. Instructions Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. PR 10-4A Depreciation by two methods; sale of fixed asset https://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 5/2/2019 Print Preview Page 4 of 6 Obj. 2 - Compute depreciation, using the following methods: straight-line, units-of-activity, and double-declining-balance., 3 - Journalize the disposal of fixed assets. New lithographic equipment, acquired at a cost of $800,000 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $90,000. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $135,000. Instructions 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. The following columnar headings are suggested for each schedule: 2. Journalize the entry to record the sale assuming that the manager chose the double-declining-balance method. 3. Journalize the entry to record the sale in (2) assuming that the equipment was sold for $88,750 instead of $135,000. PR 10-5A Transactions for fixed assets, including sale Obj. 1 - Define, classify, and account for the cost of fixed assets., 2 - Compute depreciation, using the following methods: straight-line, units-of-activity, and double-declining-balance., 3 - Journalize the disposal of fixed assets. https://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 5/2/2019 Print Preview Page 5 of 6 The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 4. Purchased a used delivery truck for $28,000, paying cash. Nov. 2. Dec. 31. Paid garage $675 for miscellaneous repairs to the truck. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck. Year 2 Jan. 6. Purchased a new truck for $48,000, paying cash. Apr. 1. Sold the used truck purchased on Jan. 4 of Year 1 for $15,000. (Record depreciation to date in Year 2 for the truck.) June 11. Paid garage $450 for miscellaneous repairs to the truck. Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years. Year 3 July 1. Purchased a new truck for $54,000, paying cash. Oct. 2. Sold the truck purchased January 6, Year 2, for $16,750. (Record depreciation to date for Year 3 for the truck.) Dec. 31. Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $12,000 and an estimated useful life of eight years. Instructions Journalize the transactions and the adjusting entries. https://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 5/2/2019 Print Preview Page 6 of 6 PR 10-6A Amortization and depletion entries Obj. 4 - Describe the accounting for natural resources, including the journal entry for depletion., 5 - Describe the accounting for intangible assets, such as patents, copyrights, and goodwill. Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. Timber rights on a tract of land were purchased for $1,600,000 on February 22. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,100,000 board feet of timber were cut and sold. b. On December 31, the company determined that $3,750,000 of goodwill was impaired. c. Governmental and legal costs of $6,600,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year. Instructions 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. 2. Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item. Chapter 10: Long-Term Assets: Fixed and Intangible: 10-8g Problems: Series A Book Title: Accounting Printed By: Jeffery Bethel (jeffery.bethel@wayland.wbu.edu) © 2018 Cengage Learning, Cengage Learning © 2019 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means - graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder. https://ng.cengage.com/static/nbreader/ui/apps/nbreader/print_preview/print_preview.html? 5/2/2019 Purchase answer to see full attachment Tags: accounting problem Managerial accounting Payments and Receipts Fixed Asset Accounts land improvements concept of depreciation User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.
