Question

Energex Travel runs boat tours along the west coast of British Columbia. It purchased on March 5, 2014, for cash of $828,000, a cruising boat with a useful life of 10 years or 13,250 hours with a residual value of $192,000. The company’s year-end is December 31.

Required
Calculate depreciation expense for the fiscal years 2014, 2015, and 2016 by completing a schedule with the following headings (round to the nearest whole dollar):


1. Depreciation is calculated to the nearest month.
2. Assume actual hours of service were: 2014, 720; 2015, 1,780; 2016, 1,535.
Analysis Component: If you could ignore the matching principle, how could you record the purchase of the boat? What impact would this have on the financial statements in the short and longterm?


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  • CreatedJanuary 08, 2015
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