Computing Depreciation and Recording Disposal Using Multiple Accounting Conventions

Whitney Company purchased equipment on July $12$ of Year $1$ for $$54,400.$ This equipment has an estimated useful life

of five years and an estimated residual value of $$6,400.$ The company depreciates this asset using the straight$-$line

depreciation method.

Required

a$.$ Compute depreciation applying different accounting conventions to the straight$-$line depreciation method.

Compute depreciation for Year $1$ using the exact date, commencing depreciation on July $13$ and using $360$ days as

the allocation base.

Compute full year, annual depreciation for Year $1$ based on the balance in the equipment account at the beginning

of the period.

Compute full year, annual depreciation for Year $1$ based on the balance in the equipment account at the end of the

period.

Compute depreciation for Year $1$ assuming one$-$half of a year's depreciation in both the year of purchase and the

year of retirement, regardless of the date of purchase or retirement.

Compute depreciation for Year $1$ assuming a full month of depreciation during the month of purchase and no

depreciation in the month of disposal.

Depreciation for Year $1$$

Depreciation for Year $1$$

Depreciation for Year $1$$

Depreciation for Year $1$$

Depreciation for Year $1$$

b$.$ Assume that the asset was retired on January $1$ of Year $4.$

$(1)$ Prepare the entry for disposal of the asset assuming that the company uses the exact date to calculate

depreciation.

$(2)$ How does the answer differ if the company used the full year $($beginning of the period$)$ depreciation method?