Calculate the depreciation expense accumulated depreciation

Assignment Help Financial Accounting
Reference no: EM132494657

Gryffindor Company purchase factory equipment on January 1, 2019, for $60,000. The equipment has an estimated life of five years and an estimated residual value of $6,000. Gryffindor's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the assets. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2019, but production subsequent to 2019 will increase by 10,000 units each year.

Required:

Question 1. Calculate the depreciation expense accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life.

Question 2. Would the units-of-production method yield reasonable results in this situation? Explain.

Reference no: EM132494657

Questions Cloud

What is porters five forces model : What is Porter's Five Forces Model? Define it and fully describe one of the forces. Which of these forces do you believe is the strongest? Why?
Determine positive accounting theory : Positive Accounting Theory (PAT) assumes that principals are aware that agents will act opportunistically, so principals stipulate in any bonus contract
Discuss comprehensively how a waiter : Discuss comprehensively how a waiter/waitress can contribute to the risk management process of the firm.
What are some arguments in favor of raising the minimum wage : What are some arguments in favor of raising the minimum wage? On the other hand, what are some arguments against raising the minimum wage?
Calculate the depreciation expense accumulated depreciation : Calculate the depreciation expense accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life.
Describing the principles of the free market : Give an example in the marketplace that describes the principles of the free market (perfect competition) and competition. 400 words or more.
Reduce the average maturity of the portfolio : You manage a bond portfolio and believe that market interest rates are going lower over the next several months. To profit from your belief, you should:
State the two types of accounting errors : Indicate the type of accounting change and how each is recognized or accounted for in the accounting records in the current year
Calculating bond issue price : Calculating Bond Issue Price. On December 31, 2018, Assuming the market rate of interest is 6%, calculate at what price the bonds are issued.

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the effect on the financial statements

Revenue of $9,880 from the rental of equipment was earned but the customer had not yet paid. What is the effect on the financial statements

  No journal entry required

For each of the following transaction for New Idea Corporation, prepare the adjusting journal entries required on July 21. (if no entry required Write "no journal entry required".

  What entry will pass to create provision for doubtful debts

It is supposed that on 31-12-2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 5 % of the sundry debtors are doubtful. It is also suppose that during the year 2008 actual bad debts were Rs. 1,6..

  Self-employed individual who owns his own business

Joe is a single, self-employed individual who owns his own business. During 2015 Joe reported $200,000 gross income and $60,000 expense from his business. He also paid $30,000 in alimony to his former spouse, $4,000 mortgage interest on his personal ..

  Suggest reasons for the changes in profitability of brinker

Suggest reasons for the changes in the profitability of Brinker during the three-year period. Suggest reasons for the changes in the profitability of McDonald's during the three- year period.

  Coding systems and terminology

Coding Systems: Which type of coding system is indicated in each of the following independent situations? Explain your reasoning.. Terminology; Match the number to the corresponding letter

  The estimated product warranty

The estimated product warranty is 4% of sales. Assume that sales were $700,000 for January.

  Gunning''s stock has exhibited a standard deviation

Gunning's stock has exhibited a standard deviation in returns of 0.5, whereas Avon stock has exhibited a standard deviation of 0.9. The correlation coefficient between the stock return is 0.2. What is the standard deviation of a portfolio composed of..

  Issuance of stock and treasury stock transactions

Journalizing issuance of stock and treasury stock transactions. Journalize the transactions.

  Calculate the expected return from dell

Calculate the expected return from Dell. Find the highest expected return that is offered by one of these stocks. Find the lowest expected return that is offered by one of these stocks.

  Compute the april inventory and the april cost of goods

Compute the April 30 inventory and the April cost of goods sold using the LIFO method. Whispering Company uses a periodic inventory system

  What is the entry for the company that provided the service

Performed $1000 in services and spent $100 for additional supplies to complete that service. What is the entry for the company that provided the service? What accounts are effected and why?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd