Mastery Problem: Long$-$Term Assets: Fixed and Intangible

Patterson Planning Corp.,

You have been hired by Patterson Planning Corp., an events planning company that recently had a fire in which some of the accounting records were damaged.

In reviewing the fixed asset records, you find three depreciation schedules that are not labeled. They are listed in the following table. One of the assets has a depreciation rate of $$4\mathrm{.}40$ per hour.

Year Schedule A Schedule B Schedule C

$1$ $$4,000$ $$10,125$ $$8,800$

$22,40013,5006,600$

$31,44013,5007,480$

$486413,5006,600$

$52963,3754,400$

$67,040$

$74,840$

$8$

Total $$9,000$ $$54,000$ $$45,760$

Question Content Area

Depreciation

$1.$ Determine which depreciation method is shown in each schedule on the Patterson Planning Corp. panel. Then match each schedule to the asset description that best characterizes the type of assets often depreciated using that method.

Asset Description Depreciation Schedule Used

Asset producing steady revenues

Asset with variable in$-$service time

Asset generating greater revenues in the early years

Question Content Area

$2.$ For each of the depreciation schedules shown on the Patterson Planning Corp., fill in the following information. If an amount box does not require an entry, leave it blank.

A B C

Useful life fill in the blank $37$acd$3072$f$8$f$06$b$\_1$

fill in the blank $37$acd$3072$f$8$f$06$b$\_2$

fill in the blank $37$acd$3072$f$8$f$06$b$\_3$

Residual value $fill in the blank $37$acd$3072$f$8$f$06$b$\_4$

$fill in the blank $37$acd$3072$f$8$f$06$b$\_5$

$fill in the blank $37$acd$3072$f$8$f$06$b$\_6$

Asset cost $fill in the blank $37$acd$3072$f$8$f$06$b$\_7$

$fill in the blank $37$acd$3072$f$8$f$06$b$\_8$

$fill in the blank $37$acd$3072$f$8$f$06$b$\_9$

Total operating hours fill in the blank $37$acd$3072$f$8$f$06$b$\_10$

fill in the blank $37$acd$3072$f$8$f$06$b$\_11$

fill in the blank $37$acd$3072$f$8$f$06$b$\_12$

Question Content Area

Final Questions

Review the depreciation schedules on the Patterson Planning Corp. panel, then answer the following questions.

$1.$ How would you adjust Schedule B if$,$ at the beginning of Year $3,$ the asset was estimated to have $5$ more years of life remaining, but with a residual value that was $$2,500$ higher?

The total depreciation for this asset now will be $fill in the blank $54818$e$0$a$1$f$97039\_1$

$.$ The depreciation amount for Year $3$ will be $fill in the blank $54818$e$0$a$1$f$97039\_2$

$.$

$2.$ What is the difference between the journal entries for discarding or selling a fixed asset?

The journal entry to

differs from the other entry because

$.$

$3.$ Complete the following sentences about depreciation.

$($A$)$ When a fixed asset is fully depreciated it is

if

$.($B$)$ The balance of the accumulated depreciation account represents

$.($C$)$ Depreciation measures

$.$