On January 1, 2023, Eastern Corporation purchased a machine for $300,000. The sales tax was $30,000 and

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Question:

On January 1, 2023, Eastern Corporation purchased a machine for $300,000. The sales tax was $30,000 and the delivery charges were $5,000. All charges were paid in cash. Eastern plans on using the machine in its business for 5 years and then disposing of it. Eastern estimates a zero salvage value. Eastern uses straight line depreciation.

Required:

Record the asset

Record the annual depreciation

Remove the fully depreciated asset and accumulated depreciation from the accounting

records

Record the transactions in the journal and post them to the ledger.

2. On July 1, 2023 Archer Automotive purchased a computer system for $200,000. Archer estimates a two year life and zero salvage value.

Required:

Record the asset

Record the annual depreciation

Remove the fully depreciated asset and accumulated depreciation from the accounting

records

Record the transactions in the journal and post them to the ledger.

3. West Coast Commercial purchased equipment on January 1, 2023, for $500,000 cash. West Coast estimates a 10 year life and zero salvage value. West Coast uses straight line depreciation. On July 1, 2024 West Coast sold the equipment for $300,000 cash.

Required:

Record the asset

Record the depreciation

Record the sale of the equipment

Record the transactions in the journal and post them to the ledger.

4. On January 1, 2023 Jones Corp purchased a machine for $700,000 cash. Jones estimates a five year life and no salvage value. Jones uses Double declining balance depreciation.

Required: Calculate the annual depreciation using the double declining depreciation balance table.

5. On January 1, 2023, Washington Corporation purchased a machine for $600,000. Washington estimates a 4-year life and $50,000 salvage value. Washington uses Double declining balance depreciation.

Required: Calculate the annual depreciation using the double declining depreciation balance table.

7. Brewster Company purchased an airplane for $500,000 on January 1, 2023 Brewster estimates that they will fly the plane for 3,000,000 miles and then dispose of the plane. Brewster estimates $0 salvage value. Brewster uses Units of production depreciation. During 2023 Brewster flew the plane 700,000 miles.

Required: Calculate the depreciation for 2023 using units of production depreciation.

8. Lancaster Pharmaceutical purchased a headache drug from Novel Pharma for $400,000 on

January 1, 2023. The patent has a remaining life of 15 years. Required: Calculate the annual amortization expense for Lancaster Pharmaceutical.

9. Mountain Corporation purchased an iron ore mine for $1,000,000, on January 1, 2023. Mountain estimates the mine will yield 5,000,000 pounds of iron ore. During 2023 Mountain extracted 1,500,000 pounds of iron ore.

Required: Calculate the depletion for 2023 for Mountain Corporation.