Reference no: EM132488024
Question 1: Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $2,850,000. Harding paid $875,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $925,000; Building, $2,750,000 and Equipment, $1,825,000. (Round percentages to two decimal places: ie .054 = 5%).
Assume that Harding uses the units-of-production method when depreciating its equipment. Harding estimates that the purchased equipment will produce 1,200,000 units over its 5-year useful life and has a salvage value of $19,000. Harding produced 285,000 units with the equipment by the end of the first year of purchase. Which amount below is closest to the amount Harding will record for depreciation expense for the equipment in the first year?
Question 2: On January 1, Year 1, Phillips Company made a basket purchase including land, a building and equipment for $770,000. The appraised values of the assets are $42,000 for the land, $700,000 for the building and $88,000 for equipment. Phillips uses the double-declining-balance method for the equipment which is estimated to have a useful life of four years and a salvage value of $10,000. What is the depreciation expense for the equipment for Year 1? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Round your intermediate percentages to four decimal places: ie .054231 = 5.42%.)
Question 3: On January 1, Year 1, Jing Company purchased office equipment that cost $15,900 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,000. The equipment had a five-year useful life and a $5,700 expected salvage value