ACC-302-Ch-13-solutions-practice

ACC-302-Ch-13-solutions-practice - EXERCISES 13–24....

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Unformatted text preview: EXERCISES 13–24. Purchase of mixer: 2005 Jan. 1 Mixing Equipment............................................... 54,000 Prepaid Maintenance.......................................... 3,000 Cash................................................................ 57,000 To record purchase of mixer. Dec. 31 Depreciation Expense......................................... 6,750* Accumulated Depreciation—Mixing Equipment...................................................... 6,750 To record depreciation for year. *($54,000/20,000 = $2.70 per hour × 2,500 hrs. = $6,750) 31 Maintenance Expense......................................... 1,500 Prepaid Maintenance..................................... 1,500 Assume written off over 2 years of contract. 2006 Dec. 31 Depreciation Expense......................................... 8,100* Accumulated Depreciation—Mixing Equipment...................................................... 8,100 *($54,000/20,000 = $2.70 per hour × 3,000 hrs. = $8,100) 31 Maintenance Expense......................................... 1,500 Prepaid Maintenance..................................... 1,500 13–26. 1. Double-declining-balance method: $125,000 × 0.20 × 6/12 = $12,500 2. Productive-output method: $125,000 –18,000 $107,000/500,000 yds. = $0.214 × 77,000 yds. = $16,478 3. Service-hours method: $125,000 –18,000 $107,000/38,000 hrs. = $2.816 × 6,500 hrs. = $18,304 4. Straight-line method: $125,000 –18,000 $107,000 × 0.10 × 6/12 = $5,350 The service-hours method allows the greatest depreciation expense for 2005. 13–28. Description Cost Salvage Base Life Depr. Delivery truck......... $24,000 $5,000 $19,000 5 yrs. $3,800 Circular saws.......... 900 130 770 7 110 Workbench.............. 320 320 8 40 Forklift..................... 9,000 500 8,500 5 1,700 Totals.................. $34,220 $5,630 $28,590 $5,650 1. $5,650 2. $5,650/$34,220 = 16.51% 3. $28,590/$5,650 = 5.1 years 13–29. 1. 2005 Furniture......................................................... 35,000 Cash............................................................. 35,000 Cash................................................................ 8,000 Accumulated Depreciation—Furniture........ 19,000 Furniture...................................................... 27,000 Depreciation Expense................................... 27,930* Accumulated Depreciation—Furniture..... 27,930 *[($125,000 + $35,000 – $27,000) × 0.21 = $27,930] 2006 Furniture......................................................... 27,600 Cash............................................................. 27,600 Cash................................................................ 6,000 Accumulated Depreciation—Furniture........ 9,000 Furniture...................................................... 15,000 Depreciation Expense................................... 30,576* Accumulated Depreciation—Furniture..... 30,576 *[($133,000 + $27,600 – $15,000) × 0.21 = $30,576] 2007 Furniture.........................................................Furniture....
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ACC-302-Ch-13-solutions-practice - EXERCISES 13–24....

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