Reference no: EM133204646

Assignment - Accounting Journal Entry Problems

Problem 1 - On July 1, 2019, Pharoah Company purchased new equipment for $80,000. Its estimated useful life was 8 years with a $16,000 salvage value. On January 1, 2022, before making its depreciation entry for 2022, the company estimated the remaining useful life to be 10 years beyond December 31, 2022. The new salvage value is estimated to be $5,000.

Prepare the journal entry to record depreciation on December 31, 2019.

Prepare the journal entry to record depreciation on December 31, 2020.

Prepare the journal entry to record depreciation on December 31, 2022.

Compute the balance in Accumulated Depreciation-Equipment for this equipment after depreciation expense has been recorded on December 31, 2022.

Problem 2 - On January 1, 2022, the Cullumber Company ledger shows Equipment $38,100 and Accumulated Depreciation $13,840. The depreciation resulted from using the straight-line method with a useful life of 10 years and a salvage value of $3,500. On this date, the company concludes that the equipment has a remaining useful life of only 2 years with the same salvage value.

Compute the revised annual depreciation.

Problem 3 - Prepare journal entries to record these transactions.

(a) Carla Vista Co. retires its delivery equipment, which cost $46,700. Accumulated depreciation is also $46,700 on this delivery equipment. No salvage value is received.

(b) Assume the same information as in part (a), except that accumulated depreciation for the equipment is $37,660 instead of 46,700.

Problem 4 - Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2022 (in millions): other plant assets $987.0, land $250.0, patents and trademarks (at cost) $500.0, machinery and equipment $2,010.0, buildings $920.0, goodwill (at cost) $210.0, accumulated amortization $54.0, and accumulated depreciation $2,120.

Prepare a partial balance sheet for Nike for these items.

Problem 5 - Crane Chemicals Company acquires a delivery truck at a cost of $37,900 on January 1, 2022. The truck is expected to have a salvage value of $3,400 at the end of its 4-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method.