On December 31, 2013, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January 1.

Required

? Compute the depletion, amortization, and depreciation expense on December 31, 2013 for each asset listed above.

? Record the entries for the assets above

? Suppose that we sold machine 2 for $50,000, record the entry

? Suppose that the building life increased from 25 years to 30 years, revise the depreciation and prepare the entry.

? Suppose that the corporation spent $20,000 in 2013 to defend the patent. Record the entry.

Transcribed Image Text:

Equipment Machine 1 Building #3 Mine 316 Mine 682 Patent Truck 1 Truck 2 Truck 3 Machine 2 $65,000 $900,000 not including land $1,000,000 $500,000 $50,000 $35,000 $50,000 $75,000 Cost $100,000 Salvage $5,000 $50,000 $0 $100,000 0 $3,000 $5,000 $10,000 $5,000 Date 2012 2004 2010 2011 2010 2010 2009 2008 2003 5 25 Life 1,000,000 tons 40,000 barrels 17 200,000 miles 150,000 miles 200,000 miles 10 Method of Depreciation DDB S/L 30,000 tons extracted 6,000 barrels extracted Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 Units of production, miles this year are 15,000 Units of production: total miles depreciated to date are 180,000 as of January 1, 2006. Miles in 2006 are 30,000 miles. S/L Equipment Machine 1 Building #3 Mine 316 Mine 682 Patent Truck 1 Truck 2 Truck 3 Machine 2 $65,000 $900,000 not including land $1,000,000 $500,000 $50,000 $35,000 $50,000 $75,000 Cost $100,000 Salvage $5,000 $50,000 $0 $100,000 0 $3,000 $5,000 $10,000 $5,000 Date 2012 2004 2010 2011 2010 2010 2009 2008 2003 5 25 Life 1,000,000 tons 40,000 barrels 17 200,000 miles 150,000 miles 200,000 miles 10 Method of Depreciation DDB S/L 30,000 tons extracted 6,000 barrels extracted Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 Units of production, miles this year are 15,000 Units of production: total miles depreciated to date are 180,000 as of January 1, 2006. Miles in 2006 are 30,000 miles. S/L

Answer rating: 100% (QA)

MACHINE 1 YEAR NET BOOK VALUE RATE DEPRECIATION BOOK VALU AT END 2012 65000 40 26000 39000 2013 3900... View the full answer