Reference no: EM13795248
Deluxe Ezra Company purchases equipment on January 1, Year 1, at a cost of $469,000. The asset is expected to have a service life of 12 years and a salvage value of $40,000.
Instructions
(a) Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method.
(b) Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years ‘digits method.
(c) Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (In performing your calculations, round constant percentage to the nearest one-hundredth of a point and round answers to the nearest dollar.)
Judds Company purchased a new plant asset on April 1, 2014, at a cost of $711,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Judds’ accounting period is the calendar year.
(a) Compute the depreciation for this asset for 2014 and 2015 using the sum-of-the-years’-digits method.
(b) Compute the depreciation for this asset for 2014 and 2015 using the double-declining-balance method
|
Prepare the journal entry to record the impairment
: The management of Petro Garcia Inc. was discussing whether certain equipment should be written off as a charge to current operations because of obsolescence. This equipment has a cost of $900,000 with depreciation to date of $400,000 as of December 3..
|
|
Compute the equivalent units of production-material costs
: Spectre Chemicals produces Canovic in a two department process. Information on the two departments for March and April, 2014 are as follows: Compute the Equivalent Units of Production, Material costs, and Conversion costs for each department for Marc..
|
|
The control environment reflects the companys attitude
: The control environment reflects the company's attitude, awareness, and actions of management and the board concerning the importance of control and how it is used. This is very relevant to an auditor's consideration of inventories and should include..
|
|
Using the sum-of-the-years digits method
: Deluxe Ezra Company purchases equipment on January 1, Year 1, at a cost of $469,000. The asset is expected to have a service life of 12 years and a salvage value of $40,000. Compute the amount of depreciation for each of Years 1 through 3 using the s..
|
|
The shipment was not insured
: Capsule Corp. purchased merchandise from Store Palace on May 1st; terms of purchase were FOB shipping point, 3/5, n/60. The goods were shipped on May 3rd but were lost in transit before they arrived at Capsule Corp.; the shipment was not insured. Whi..
|
|
Ratios for the current year-current ratio-acid-test ratio
: Compute the following ratios for the current year: Current ratio, Acid-test ratio, Inventory turnover
|
|
Tax law provides methods of cost recovery for assets
: The tax law provides four methods of cost recovery for assets: 1) immediate deduction of the total cost when paid or incurred; 2) deferral of cost until the property is sold or otherwise disposed of; 3) deduction based on a percentage of income from ..
|
|
Club is a merchandising entity
: Sam’s Club is a merchandising entity; on October 1st, they purchased goods from a company for $22,000 with terms of freight on board (FOB) shipping point, 3/10, n/EOM, Sam’s Club paid 30% of the amount due on October 5th, another 30% on October 9th, ..
|