Reference no: EM133153414

Question - Solve the following:

Q1. A machine costing $185,000 with a five-year life and $20,000 residual value was purchased January Compute depreciation for each of the five years, using the double-declining-balance method.

Q2. Solare Company acquired mineral rights for $60,000,000. The diamond deposit is estimated at 6,000,000 tons. During the current year, 2,300,000 tons were mined and sold.

(a) Determine the depletion rate.

(b) Determine the amount of depletion expense for the current year.

(c) Journalize the adjusting entry to recognize the depletion expense.

Q3. An asset was purchased for $58,000 and originally estimated to have a useful life of 10 years with a residual value of $3,000. After two years of straight-line depreciation, it was determined that the remaining useful life of the asset was only two years with a residual value of $2,000.

(a) Determine the amount of the annual depreciation for the first two years.

(b) Determine the book value at the end of Year 2.

(c) Determine the depreciation expense for each of the remaining years after revision.

Q4. Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of five years, or 14,000 operating hours, and a residual value of $10,000. Compute the depreciation for the first and second years of use by each of the following methods:

(a) Straight-line

(b) Units-of-activity (1,200 hours first year; 2,250 hours second year)

(c) Double-declining-balance

Q5. Machinery is purchased on July 1 of the current fiscal year for $240,000. It is expected to have a useful life of four years, or 25,000 operating hours, and a residual value of $15,000. Compute the depreciation for the last six months of the current fiscal year ending December 31 by each of the following methods:

(a) Straight-line

(b) Double-declining-balance

(c) Units-of-activity (used for 1,600 hours during the current year)