Requirements1. Prepare a schedule of depreciation expense, accumulated depreciation, andbook value per year for the equipment under the three depreciation methods:straight-line, units-of-production, and double-declining-balance. Show yourcomputations. Note: Three depreciation schedules must be prepared.2. Which method tracks the wear and tear on the equipment most closely?I Granny's Fried Chicken bought equipment on January 2, 2024, for $21,000 The equipment was expected to remain in service for four years and to operate for 3.600 hours. At the end of the equipment'suseful life, Granny's estimates that its residual value will be $3,000. The equipment operated for 360 hours the first year, 1,080 hours the second year, 1,440 hours the third year, and 720 hours the fourth yearRead the requirementsRequirement 1. Prepare a schedule of depreciation expense; accumulated depreciation, and book value per year for the equipment under the three depreciation methods straight-line, units of production,and double declining-balance Show your computations. Note: Three depreciation schedules must be prepared.Begin by preparing a depreciation schedule using the straight-line methodStraight Line Depreciation ScheduleDate1-2-202412-31-202412-31-202512-31-202612-31-2027AssetCostDepreciation for the YearUsefulLifeDepreciable.CostBookDepreciation AccumulatedExpense Depreciation Value

The total sum of money or other resources used to purchase, create, or build an item is referred to…

Granny's Fried Chicken bought equipment on January 2, 2024, for $21,000 The equipment was expected to remain in service for four years and to operate for 3.600 hours. At the end of the equipment's useful life, Granny's estimates that its residual valoe will be $3,000. The equipment operated for 360 hours the first year, 1,060 hours the second year, 1,440 hours the third year, and 720 hours the fourth year Read the requirements Requirement 1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciation methods straight line, units of production, and double declining-balance Show your computations. Note: Three depreciation schedules must be prepared. Begin by preparing a depreciation schedule using the straight-line method Straight Line Depreciation Schedule Date 1-2-2024 12-31-2024 12-31-2025 12-31-2026 12-31-2027 Asset Cost Depreciable Cost Depreciation for the Year Useful Life Book Depreciation Accumulated Expense Depreciation Value

Granny's Fried Chicken bought equipment on January 2, 2024, for $21,000 The equipment was expected to remain in service for four years and to operate for 3.600 hours. At the end of the equipment's useful life, Granny's estimates that its residual valoe will be $3,000. The equipment operated for 360 hours the first year, 1,060 hours the second year, 1,440 hours the third year, and 720 hours the fourth year Read the requirements Requirement 1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciation methods straight line, units of production, and double declining-balance Show your computations. Note: Three depreciation schedules must be prepared. Begin by preparing a depreciation schedule using the straight-line method Straight Line Depreciation Schedule Date 1-2-2024 12-31-2024 12-31-2025 12-31-2026 12-31-2027 Asset Cost Depreciable Cost Depreciation for the Year Useful Life Book Depreciation Accumulated Expense Depreciation Value

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 10E: Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual...

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Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.
Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of twenty years, but Calico only expects to be able to sell the drug for fifteen years. Calculate the amortization expense and record the journal for the first-year expense.
Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
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Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.
Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $5,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and it expects to deplete it over ten years (150 acres in year one, 300 acres in year two, 250 acres in year three, 150 acres in year four, and 100 acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.