Reference no: EM133109707
Question 1 - On 1st of January 2019, the company GETTY, Ltd. purchased a license for computer software.
The price of the license is $15,000 and its useful life 5 years.
On January 1st, 2022, the company sells a truck of its fleet for $84,000. The company had purchased it on January 1st, 2019 for $136,000. The car had an estimated useful life of 6 years and an estimated salvage value of $16,000 at the date of the purchase.
1. Prepare the journal entries for the amortization of the software to be made on December 31, 2019 using the straight line method
2. Prepare a complete depreciation schedule of the vehicle using the straight line method
3. Prepare a complete depreciation schedule of the vehicle using the double declining balance method
4. Record the journal entries for the sale of the vehicle taking into account that the company used the straight line method for depreciation purposes
5. Record the journal entries for the sale of the vehicle taking into account that the company used the double declining balance method for depreciation purposes
Question 2 - On 1st of January 2020 the company purchased machinery for $90,000.
The estimated salvage value is $10,000 and the estimated useful life if 9 years.
On January 1, 2022, the useful life is revised to 7 years in total
1. Prepare a complete depreciation schedule for the machinery taking into account the original data.
2. Calculate the new depreciation expense as from year 2022.
Question 3 - In order to finance a new investment the company signs on Jan 1, 2021 a 10% note payable for 987,000.
The company will repay the note payable with monthly installment payments of $9,000.
The first installment payment will be made on January 31, 2021.
(a) Complete the amortization table for the first four payments by entering the correct dollar amounts in the blank spaces provided. Round to the nearest dollar.
(b) Record the first payment in the general journal.
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