403) Biicsmer Hleconies neue the following coat ext fren maine prac 7 L eine J lettering on truck immediately upon Purchase € 5.00 emi 3 tation ant testing OF EC1OFY Machinery ase an i eal estate broker's commission on land purchased 2.000 ig nsorance premium paid for first year’s insurance on new truck 4.500 Fost of landscaping on property purchased rn eo 4 cost of paving parking lot for new building constructed 7.200 Cost of clearing. draining, and filing land as 4, architect’ fees on self-constructed building 12.600 10.000 structions ~~" account Bliesmer would debit each of the cost: sts, in March 1, 2020, ger Gi i (Lo Aiding ae pea eet Group acquired real estate on which it planned to construct a 3 bling pany paid €86,000 in cash. An old warehouse on the property was razed at at of €9.: ; a lvaged wet were sold for €1,700. Additional expenditures before construc- 1 includes 1,100. attorney’ 's fee for work concerning the land purchase, €5,100 real estate jes fee, €7.800 architects fee, and €12,700 to putin driveways and a parking lot. ition is a process of asset valuation, not cost allocation. on provides for the proper matching of expenses with revenues. hould approximate its ses of plant assets: land, buildings, and equipment. alue of a plant asset s! fair value. applies to three clas: not apply to a building because its usefulness and revenue-producing abi jin intact over time. yy of a depreciable asset will decline due to wear and tear an roducing abilit cumulation of cash for replacement o i asset results in an accumula rl ion on an asse Scanned with CamScannermang trae ei spt Sanda parking hot 7 « me ce. work sa SST architect's Fee. amd €13 yy" tom ons 05g amount 10 be rep pst oi weet pot used in par (Comet, the accoune | ne , COUNT He he deine fy ann Tremel has prepared the ea 400 press HF sce 98 Hist of pes 0 jaion AP ASSet Valuation, no tatements ate depres per ation prOvIES |OFIHE PNOPEE Hatch st MOCation ane Uetersam Dero MCHINE Of e 7 value of a plant asset chia Penses with 2 eet " Howl spyrevetnite ie tay nee ppties o three eases of nit vale s ation pepe meiatton BOOS MOL APPLY tay anait intact over time, MANE Sete: Han, ty erally Serer eMC PANTUCINE. ability: of Teer shi IE ABITLY Of a depre beotesvernee ing depreciation on an asse gnizing dep 1 ANset re ASSet Will decline due to wear and tear and to cults in an Reve a Bee accumulation of cash for replacement of the tre balance in accumulated depreciation represe — ‘Mts the total cost that has been charged to jon expense and accumulate iat pel mulated depreciation are reported ‘i g. Depre Teported on the income statement. ree factors affect the computation of depreciat ‘Clation: cost, useful life | useful life, and residual value -™ entity each statement as {Tue oF false, If false, indicate how to correct the statememt E105 (LO Se Be vines tses the units-of-activity method in depreciating its buses. One bus wes, sed 07 ay 1 202). at a Cost of RS145,000. Over its 4-year useful life, the bus is expected _ pte driven 100.000 miles. Residual value is expected to be RS15.000 , m= Compute the depreciable cost per unit. Prepare a depreciation schedule assuming actual mileage was 2020, 27,000; 2021, 32,000; 2022, ) Xanadu A/S purchased a new machine on October 1, 2020, at a cost of €96,000. The com- that the machine will have a residual value of €12,000. The machine is expected to be Scanned with CamScannerAN s\Y WAN SNES \ We \ lant Assets, Natural Resources, and Intangible Assets Instructions Compute the depreciation expense under the following methods for the a. Straight-line for 2020. aichine usage was 1,700 hours, ate for 2020 and 2021. b. Unite-of-activity for 2020, assuming €. Decliningybalance using double the straight-li sent E10.7 (LO 2) Tanger Interiors purchased a delivery truck for R$38,000 on January 1, 202 has an expected residual value of RS6.000, and is expected to be driven 100,000 miles over useful life of 8 years. Actual miles driven were 15,000 in 2020 and 12,000 in 2021 0. The tracy iS estimatey Instructions a, Compute depreciation expense for 2020 and 2021 using (1) the straight-line method, Q. i ma ) the Units. of-activity method, and (3) the double-declining-balance method. b. Assume that Tanger uses the straight-line method A. Prepare the journal entry to record 2020 depreciation. 2, Show how the truck would be reported in the December 31, 2020, statement of finan ‘Al Position )2) Mooney Led. completed construction of an office building for £2,400,000 on December} i ly estimated that the building would have a residual value of £0 and a useful life of. detailed review Of the expenditures related to the building indicates that £300,000 of personal property and £1 80,000 for land improvements, The personal property| land improvements have a depreciable life of 10 years. ight-line metho Scanned with CamScanner700 hours 2020 and 2021 112,000 in 2021 hivery tek pected to be 3020 an i My 0.7 (Lo 2) Thane resisival {020 and 2021 Hs g suaight-Hine method, (2) yy. Uni, ane valance method. 2020 depreciation. the December 31, 2020, statement of financial» it om, ng for £2.400,000 0n Decerg, Jompleted construction of an office but ue of £0 and a useful ise! ST ahat the building would have a residual vs ; oe related to the building indicates that £300,994, eae Of th "1 £180,000 for land improvements. The personal propery y* ave a depreciable life of 10 years. TY hay E108 (LO2) Mooney Ltd. & 2010, The com sears, A more detailed review of the expen al cost was used for personal property a depreciable life of 5 years and land impro yyements ha _Instructions “Compute depreciation expense for 2020 using component depreciation and the straight-line metho secation | E109 (L102) Steve Grant, the new controller of Greenbriar Ltd. has reviewed the expected uses le assets at the beginning of 2020. His findings are as nine 5 and residual values of selected depreciabl = Accumulated Total Useful Type of Date Depreciation _Life in Years Residual Value Asset Acquired Cost 1/1/20 Old Proposed Old Proposed Building W/i/10 «£800,000 ~—-£190,000 40 50 £40,000 “Elgg, Warehouse ‘I/I/I5 100,000 18,000 25 20 10,000 aaa All assets are depreciated by the straight-line method. Greenbriar i a 5 uses a calendar year in i nual financial statements. After discussion, management has agreed to accept aie poe ‘ ange Instructions ‘ompute the revised annual depreciation on each asset in 2020. (Show computations.) the entry (or entries) to record depreciation on the building in 2020. Barton capa purchased equipment on January 1, 2020, at a cost of €350. +I preciation method, a 5-year estimated useful li f . “ a ‘ul life, and no residual pendent appraisers determined that the assets have a fair value of 330 i woe : . record 2020 depreciation using the straight-line method. y fo record the revaluation of the equipment. record 202 iti i o 1 depreciation, assuming no additional revaluation. the end of i the end of its first year of operations, Franklin SA chose &. Scanned with CamScannernpeaisers determine that the plant assets | oder re YOU ANSARI 19 atts Nave a Fait vate ego NONE ANTS 1 ATS aC). £52000 Record 7 jeangwer FIM PAL CC). Whal WOHKT he the you © value of Fra ; MOUNT Of Franklin's yi SF change in the value of Franklin's equipment W's 2021 depreciation? Mc in 2021, a 4-year remaining life, avd i j esented below are selected transactions . preztto” Lica reece Ons at Ingles Company for 2020 FTE Retiro picee of machinery that was purchased on J ) con that date. Ithad a useful life of 10 years with no respi oe te Phe Machine cost E5800 | No residua Sold a computer that was purchased on January | pe " Sal auseful life of 5 years with no residual value, 7 Is he c sna 1 31 Discarded a delivery truck that was purchased e pomuter was sold for £14,600 on January 1, 2 . It was depreciated based on a 6-year useful life Se 1 a 16. The truck cost £34,000, .000 res c. 17. The computer cost £40,000. tt had tions I entries required on the above dates, includin ets disposed of. Ingles Company : 8 entries to update depreciation, where ap- ofRecember 31, 2019.) Uses straight-line depreciation. (Assume depreciation is (L03) Francis Manufacturing owns equipment that cost €50, been’depreciated using the straight-line method based timated useful life of 5 years. 000 when purchased on January 1, on an estimated residual value of journal entries to record the sale of the equipment in these four independent situations 000 on January 1, 2020. on January 1, 2020. on October 1, 2020. d CHF736,000 in a mine estimated to have $00,000 124,000 tons of ore were mined. 1, 2020, Ticino AG investe ‘ , During the last 6 months of 2020, to record depletion 90,000" ste, How are the costs | 000 tons of ore wer’ mined, but only Scanned with CamScannerMSU on Fagg MAY For 2020) with eM NY LON TH Hite oF 10 soon that was purchased Ne Machine co CESKY The trek cost E404 ual value. a required on the above date sposed of Ingles Company ye Ming ey < Mies ember 31, 2019.) MaiRN ing Update depreciation, whe epreciation. (Assume deprecian ‘ME that i COST ESO,000 veh when purchased on J; m January 1, Jom tated residual value of pstrt¥08 sancis's journal entries to ree Fi f ee isi:000 on Jumvary 2028) he equipment in these four independent sit Fond for €28.000 on May 1. 2020, maons p So ‘goid for €11.000 on January 1, 2029, . 4. sold for €11.000 on October 1, 2020, 14 (104) On July 1, 2020, Ticino AG in % fofore of uniform grade, During the last g an CHF736,000 in Months of 2020, 124.000 tons mine estimated to have 800,000 of ore were mined. ‘a Prepare the journal entry to record depletion, 'p. Assume that the 124,000 tons of ore were mined, © applicable to the 34,000 unsold units reported?” urchased a small company and recorded goodwill of €150, i fi - 000. Its useful life is indefinite, Purchased for €84,000 a patent with an estimated useful life of 5 years and a 7 20 years. oe $560,000 Purchased patent (7-year lle) 7 360,000 Goodwill purchased indefinite) oe expiration date ypment Costs incurred aaa ouical feasibility 8-year franchise Research and ¢ prior to (ee hne Scanned with CamScanner> Bithne, in ation ~ mo changing the oM machine (which had a tate pont cash of £ instructions ‘a. Propare the entry to record the exch 1 the exchange of accers hy Rijo Led steal C0, of aecete hy G b. Prepare the entry to rece xpress Delivery exchanged detive, £10.19 (0 6) Jays Delivery Company and Actro’s Bapress Delivery FEMI detive a, depreciation of € 16,000 0 ta — aruary 1. 2020 Jay's trick coat £22,000 ft hae accunmlated dep an €4,000. The transaction has commercial substance Instructions . ‘a. Jowrnalive the exchange for Jay's Delivery Company, 1. Journalize the exchange for Astro’s Express Delivery. an ware 2) Diaz SLU was organized on January 1. During the frst year of operations, the fo, | plant assefexpenditures and receipts were recorded in random order. me ae Del 1. Cost of filling and grading the land © 649 2. Full payment to building contractor 780.149 3. Real estate taxes on land paid for the current year 5.0% 4. Cost of real estate purchased as a plant site (land €100,000 and building €45,000) 145.009 5. Excavation costs for new building 35.00 6. Architect's fees on building plans 10509 7. Accrued real estate taxes paid at time of purchase of real estate 2800 8. Cost of parking lots and driveways 14.000 q 9. Cost of demolishing building to make land suitable for construction, of new building 15,000 €1,013,900 Credit from salvage of demolished building n the other appropriate columns, For amou account titles. Other Accounts Scanned with CamScannert “ p10.2 (LO 2) In recent years, Freeman ‘Transportation 7 purchased three used buses. Because of frequent turhover in the accounting department, a different accountant selected the depreciation e and v: method for each bus, and various methods were selected. Information concerning the buses is sum- \ marized below. : Residual. Useful Life Bus Acquired Cost Value in Years Depreciation Method £96,000 £6,000 5 Straightline 10,000, 4 Declining-balance Units-of-activity W118 I//8 INN9 140,000, 5 92,000 8,000 Boe the amount of accumulated depreciation on each bus at December 31, 2020. 1¢ depreciation expense for this bu Biwas purchased on April | instead of January 1, what is th Band (2) 2019? Scanned with CamScanner