GNL Incorporated purchased a new piece of equipment for $60,000 Canadian from a US company. The...

 

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GNL Incorporated purchased a new piece of equipment for $60,000 Canadian from a US company. The exchange added to and paid in cash on the transaction was $20,000. Freight paid on bringing the equipment to Canada was $9,000 and installation and testing once on location was $5,000. All items were paid for and the equipment was installed and operational on January 1, 2019 and the year-end is December 31, 2019. Requirments: 1 What is the total cost of the capital asset and what is the entry to record the asset? Mark: 2 2 If salvage value is $14,000 and useful life is 10 years what would the amortization expense be using the straight line method for year one and year two? Mark: 1 3 If the salvage value and useful life was the same, but the equipment wasn't installed and operational until March 1, 2019, what would the amortization expense be under the straight line method for year one and year two? 2 Mark: 11 4 If the purchase price and residual value remain the same and estimated units of production for the life of the unit was 125,000 units, and the units produced in year one was 12,200 units and in year two was 13,600 units. What would the per unit depreciation amount be? What would the amortization expense be for year one and then for year two? What is the net carrying amount after year two? Mark 3 5 Again if the purchase price, residual value, and installation date were the same as requirements one and two but instead of the straight line method, the double declining balance method was used at 15%. What would the amortization expense be for year one and year two? Prepare the journal entry to record the amortization for the first year, include a description. GNL Incorporated purchased a new piece of equipment for $60,000 Canadian from a US company. The exchange added to and paid in cash on the transaction was $20,000. Freight paid on bringing the equipment to Canada was $9,000 and installation and testing once on location was $5,000. All items were paid for and the equipment was installed and operational on January 1, 2019 and the year-end is December 31, 2019. Requirments: 1 What is the total cost of the capital asset and what is the entry to record the asset? Mark: 2 2 If salvage value is $14,000 and useful life is 10 years what would the amortization expense be using the straight line method for year one and year two? Mark: 1 3 If the salvage value and useful life was the same, but the equipment wasn't installed and operational until March 1, 2019, what would the amortization expense be under the straight line method for year one and year two? 2 Mark: 11 4 If the purchase price and residual value remain the same and estimated units of production for the life of the unit was 125,000 units, and the units produced in year one was 12,200 units and in year two was 13,600 units. What would the per unit depreciation amount be? What would the amortization expense be for year one and then for year two? What is the net carrying amount after year two? Mark 3 5 Again if the purchase price, residual value, and installation date were the same as requirements one and two but instead of the straight line method, the double declining balance method was used at 15%. What would the amortization expense be for year one and year two? Prepare the journal entry to record the amortization for the first year, include a description.

Answer rating: 100% (QA)

1 Date Jan 1 Equipment 2019 Cash 2 Cost of Asset Add Cash paid Freight installation Cost of Asset 4 ... View the full answer