Help with Ch. 11 Homework (1) - BriefExercise112 a...

Info icon This preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Help with Chapter 11 Homework Brief Exercise 11–2 a. Straight-line: $30,000 – 2,000 = $7,000 per year 4 years b. Sum-of-the-years’ digits: Sum-of-the-digits is ([4 (4 + 1)] ÷ 2) = 10 2016 $28,000 x 4/10 = $11,200 2017 $28,000 x 3/10 = $ 8,400 c. Double-declining balance: Straight-line rate is 25% (1 ÷ 4 years) x 2 = 50% DDB rate 2016 $30,000 x 50% = $15,000 2017 ($30,000 – 15,000) x 50% = $ 7,500 d. Units-of-production: $30,000 – 2,000 = $2.80 per unit depreciation rate 10,000 hours 2016 2,200 hours x $2.80 = $6,160 2017 3,000 hours x $2.80 = $8,400 Brief Exercise 11–4 Annual depreciation will equal the group rate multiplied by the original cost of the group: 1
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
$425,000 x 18% = $76,500 Since depreciation records are not kept on an individual asset basis, dispositions are recorded under the assumption that the book value of the disposed item exactly equals any proceeds received and no gain or loss is recorded. Any actual gain or loss is implicitly included in the accumulated depreciation account. Journal entry (not required): Cash ................................................................................ 35,000 Accumulated depreciation (difference) ............................ 7,000 Equipment (account balance) .......................................... 42,000 Brief Exercise 11–5 $8,250,000 Depletion per foot = = $2.75 per foot 3,000,000 cubic feet Year 1 depletion = $2.75 x 700,000 feet = $1,925,000 Year 2 depletion = $2.75 x 800,000 feet = $2,200,000 2
Image of page 2
Brief Exercise 11–6 Expenses for the year include: Amortization of the patent = $400,000 Amortization of the developed technology * = 300 ,000 Total $700,000 Goodwill is not amortized. In-process research and development is not amortized. Amortization of the patent: ($4,000,000 5) x 6/12 = $400,000 *Amortization of the developed technology: ($3,000,000 5) x 6/12 = $300,000 Brief Exercise 11–7 Calculation of annual depreciation after the estimate change: $9,000,000 Cost $320,000 Previous annual depreciation ($8 million ÷ 25 years) x 2 years 640 ,000 Depreciation to date (2014–2015) 8,360,000 Undepreciated cost 500 ,000 Revised residual value 7,860,000 Revised depreciable base  18 $ 436,667 2016 depreciation 3
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Brief Exercise 11–8 In general, we report voluntary changes in accounting principles retrospectively. However, a change in depreciation method is considered a change in accounting estimate resulting from a change in accounting principle. In other words, a change in the depreciation method reflects a change in the (a) estimated future benefits from the asset, (b) the pattern of receiving those benefits, or (c) the company’s knowledge about those benefits, and therefore the two events should be reported the same way. Accordingly, Robotics reports the change prospectively; previous financial statements are not revised. Instead, the company simply employs the double-declining-balance method from now on. The undepreciated cost remaining at the time of the change would be depreciated DDB over the remaining useful life.
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern