Chapter 9 - Practice Problems Problem #1 Straight Line Depreciation Method: On January 3, ABC Company purchased
Question:
Chapter 9 - Practice Problems
Problem #1
Straight Line Depreciation Method:
On January 3, ABC Company purchased equipment for $325,000. The equipment has an estimated useful life of 15 years and a residual value of $12,500.
- Determine the depreciable cost
- Prepare the journal entry to record the depreciation at year end.
Problem #2
Units of Output Depreciation Method
On January 4, ABC Company purchased film production equipment at a cost of $900,000. The equipment has no residual value and a useful life of 400,000 hours. For the first year, the company used the equipment for 150,000 hours.
- Determine the depreciable cost
- Prepare the journal entry to record the depreciation at year end.
Problem #3
Double Declining Balance Depreciation Method
On January 5, ABC Company purchased equipment at a cost of $700,000. The equipment has a residual value of $200,000 and a useful life of 8 years.
- Determine the depreciable cost
- Prepare the journal entry to record the depreciation at year end.
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson