E9.
3
a Cost of Land
Purchase price 86,000
Net removal cost 7700 (9,400-1,700)
Attorney's fee 1,100
Broker's fee 5,100
99,900
b Architect's fee 7,800 Cost of building
Driveway, parking lot 12,700 Land improvement
E9.5
Cost 145,000
Redisual value 15,000
Useful life 100,000 miles
a Depreciation cost per mile 1.3 (145,000-15,000)/100,000
b Depreciation schedule
Annual Accumulated
Year Unit of activity Depreciation/mile depreciation depreciation Book value
2025 27,000 1.3 35,100 35,100 109,900
2026 32,000 1.3 41,600 76,700 68,300
2027 24,000 1.3 31,200 107,900 37,100
2028 17,000 1.3 22,100 130,000 15,000
E9.7
Delivery truck
Cost 38,000
Residual value 6,000
Useful life 8 years
100,000 miles
Actual activity
2025 15,000
2026 12,000
a) Depreciation expense for 2025, 2026
(1) Straight-line
Annual depreciation 4000 (38,000-6,000)/8
(2) Unit-of-activity
Depreciation per mile 0.32 (38,000-6,000)/100,000
Depreciation expense
2025 4800 (0.32*15,000)
2026 3840 (0.32*12,000)
(3) Double-declining-balance
Depreciation rate 0.25 (2*1/8)
Depreciation expense
2025 9,500 (38,000-0)*0.25
2026 7,125 (38,000-9,500)*0.25
b) Assume straight-line basis
1 Adjusting entry
31/12/2025 Depreciation expense 4,000
Accumulated depreciation 4,000
2 Statement of financial position
31/12/2025
Non-current assets
Equipment 38,000
Less: Accumulated depreciation (4,000)
Book value 34,000
P9.2
Bus Acquired Cost Residual value Useful life Depreciation method
1 1/1/2023 96,000 6,000 5 Straight-line
2 1/1/2023 140,000 10,000 4 Declining-balance
3 1/1/2024 92,000 8,000 5 Unit-of-activity
120,000 miles
a Accumulated depreciation at 31/12/2025
Bus 1 - Straight line
Annual depreciation 18,000 (96,000-6,000)/5
Accumulated depreciation at 31/12/2025 54,000 (18,000*3 years)
Bus 2 - Declining balance
Depreciation rate 0.5 (2*1/4)
Depreciation expense = (Cost-AD)*rate AD (31/12)
2023 70,000 (140,000-0)*0.5 70,000
2024 35,000 (140,000-70,000)*0.5 105,000
2025 17,500 (140,000-105,000)*0.5 122,500
Bus 3 - Unit of activity
Depreciation per mile 0.7 (92,000-8,000)/120,000
Actual miles Depreciation AD
2024 24,000 16,800 16,800
2025 36,000 25,200 42,000
P9.3
a Machine A - Straight line
Acquired 1/1/2025
Cash price 35,000
Sales tax 2,200
Acquisition
Shipping cost 150 cost
Insurance during shipping 80
Installation and testing 70
Oil and lubricants 100 Expense of first year
Useful life 5 years
Residual value 5,000
1) Acquisition cost 37,500
1/1/2025 Equipment 37,500
Cash 37,500
2) Annual depreciation 6500 (37,500-5,000)/5
31/12/25 Depreciation expense 6500
Accumulated depreciation 6500
b Machine B - depreciation expense each year
Acquired 1/1/2025
Cost 80,000
Residual value 5,000
Useful life 4 years
125,000 units
1) Straight-line
Annual depreciation 18750 (80,000-5,000)/4
2) Double declining balance
Depreciation rate 0.5 (2*1/4)
Year Depreciation expense = (Cost - AD)*rate
2025 40,000 (80,000-0)*0.5
2026 20,000 (80,000-40,000)*0.5
2027 10,000 (80,000-40,000-20,000)*0.5
2028 5,000 (80,000-40,000-20,000-10,000)-5,000
3) Unit-of-activity
Depreciation per unit 0.6 (80,000-5,000)/125,000
Year Actual usage Depreciation expense
2025 42,000 25,200
2026 37,000 22,200
2027 28,000 16,800
2028 18,000 10,800
reciation method
ining-balance
E9.13
Equipment
Cost 50,000 1/1/2022
Residual value 8,000
Useful life 5 years
Depreciation method Straight-line
Depreciation expense per year 8400 (50,000-8,000)/5
a) Sale on 1/1/2025
AD (3 years) 25,200 (8,400*3)
Book value 24,800 (50,000-25,200)
Cash price 28,000
Gain 3,200
c) Sale on 1/1/2025
AD (3 years) 25,200 (8,400*3)
Book value 24,800 (50,000-25,200)
Cash price 11,000
Loss (13,800)
P9.6
Equipment
Cost 50,000
AD (22,000)
Book value 28,000
a Scrap with no value
Cash price -
Book value (28,000)
Loss (28,000)
b Sale for 25,000
Cash price 25,000
Book value (28,000)
Loss (3,000)
c Sale for 31,000
Cash price 31,000
Book value (28,000)
Gain 3,000