Big Boys Hot Dogs purchased a hotdog stand for $ 40,000 with an estimated useful life of
Question:
Big Boy’s Hot Dogs purchased a hotdog stand for $ 40,000 with an estimated useful life of eight years and no residual value. Suppose that after using the hotdog stand for four years, the company determines that the asset will remain useful for only two more years. Record Big Boy’s Hot Dogs’ depreciation on the hotdog stand for year 5 by the straight line method.
Step by Step Answer:
Journal DATE ACCOUNTS POST REF DR CR DepreciationExpense Hot Do...View the full answer
Financial Accounting
ISBN: 978-0132889711
1st Canadian Edition
Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
Students also viewed these Accounting questions
-
An intangible asset with an estimated useful life of 30 years was acquired on January 1, 2002, for $540,000. On January 1, 2012, a review was made of intangible assets and their expected service...
-
An intangible asset with an estimated useful life of 30 years was acquired on January 1, 2009, for $540,000. On January 1, 2019, a review was made of intangible assets and their expected service...
-
A machine originally had an estimated useful life of 11 years, but after 4 complete years, it was decided that the original estimate of useful life should have been 16 years. At that point the...
-
You find a certain stock that had returns of 18 percent, 23 percent, 16 percent, and 9 percent for four of the last five years. If the average return of the stock over this period was 10.3 percent,...
-
Suppose Melvins Bank can make a bet on derivatives that has a 2/3 probability of earning $20 and a 1/3 probability of losing $40. a. Assume Melvins has $20 in capital. What are the possible costs and...
-
Sharon Yeagle was an assistant to the vice president of student affairs at Virginia Polytechnic Institute and State University (Virginia Tech). As part of her duties, Yeagle helped students...
-
In accordance with the assignment technique and comparison group, discuss the various control techniques that will be used with this specific design. Develop a hypothetical research scenario that...
-
The Tristan Corporation sells 250,000 V262 valves to the automobile and truck industry. Tristan has a capacity of 150,000 machine-hours and can produce two valves per machine-hour. V262s contribution...
-
Income and Expenses Salary Employees' Provident Fund (EPF) 1. Particulars regarding John and his wife are as follows: Wife RM25,000 RM2,000 John RM85,000 RM6,000 LIP RM3,500 RM1,200 Books and...
-
Allegiant issues 6%, 20-year bonds with a par value of $2,000,000 and semiannual interest payments. In each separate situation, determine whether the bond is issued at par value, at a discount, or at...
-
Identify each of the following assets as a plant asset (P) or an intangible asset (I): .............. 1. Franchises .............. 2. Vehicles .............. 3. Buildings .............. 4. Furniture...
-
Classify each of the following expenditures as capital expenditure (CAP) or revenue expenditure (REV): .......... a. Purchase price .......... b. Ordinary recurring repairs to keep the machinery in...
-
If and exist but are not equal, then is not differentiable at c, and the graph of has a corner at c. Prove that f is continuous at c. lim h0- f(c+h)-f(c) h
-
2. The rotating-cylinder viscometer shown in the figure below shears the fluid in a narrow clear- ance Ar. The torque (M) required to rotate the cylinder at an angular velocity (2) is measured and...
-
The process of risk management requires organizations to understand risk to operations. This requires analysis and planning. 1. Define and explain Risk. 2. What is Risk management and the Risk...
-
The number of students using a new cell phone application doubles every seven days. The initial number of users is 100 How many students will use the application after t days?
-
An investor buys an annuity with payments of principal and interest of $500 per quarter for 13 years. Interest is at the effective rate of 7% per annum How much interest does the investor receive in...
-
solve problems of "LinkedList.java", problems are in comments of "LinkedList.java" Please showing the output There are some tested method in "LinkedListTest.java" (Please don't modify "Account.java"...
-
Mountain Best Lodge has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared before recording the May 31 monthly adjustments:...
-
Show that gj concave AHUCQ Abadie For nonnegative variables, we have the following corollary.
-
Deer Track Park is a private camping ground near the Lathom Peak Recreation Area. It has compiled the following financial information as of December 31, 2012 Instructions(a) Determine Deer Track...
-
Kellogg Company is the world's leading producer of ready-to-eat cereal and a leading producer of grain-based convenience foods such as frozen waffles and cereal bars. The following items were taken...
-
This information is for OBrien Corporation for the year ended December 31, 2012. Cash received from lenders ..... $20,000 Cash received from customers ... 50,000 Cash paid for new equipment .......
-
Quantitative Problem 1: Assume today is December 31, 2019. Barrington Industries expects that its 2020 after tax operating income [EBIT(1-T)] will be $400 million and its 2020 depreciation expense...
-
Diversity in the Workplace Share an article that shows an example of the importance of cultural diversity in the global workplace. As Christians, how can we promote diversity in our future workplaces?
-
There is a need for a parking lot within a given town. A land in a suitable location is available for purchase that they could pave to provide some additional parking. Based on a survey of local...
Study smarter with the SolutionInn App