Class25 - Solutions

Class25 - Solutions - EXERCISE 22-6 (a) Depreciation to...

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EXERCISE 22-6 (a) Depreciation to date on equipment Sum-of-the-years’-digits depreciation 2005 (5/15 x $510,000) $170,000 2006 (4/15 x $510,000) 136,000 2007 (3/15 x $510,000) 102,000 $408,000 Cost of equipment $525,000 Depreciation to date 408,000 Book value (December 31, 2007) $117,000 Book value – Salvage value = Depreciable cost $117,000 – $15,000 = $102,000 Depreciation for 2008: $102,000/2 = $51,000 Depreciation Expense. .................................. 51,000 Accumulated Depreciation—Equipment 51,000 (b) Depreciation to date on building $693,000/30 years = $23,100 per year $23,100 x 3 = $69,300 depreciation to date Cost of building $693,000 Depreciation to date 69,300 Book value (December 31, 2007) $623,700 Depreciation for 2008: $623,700/(40 – 3) = $16,856.76 Depreciation Expense. .................................. 16,856.76 Accumulated Depreciation—Buildings 16,856.76 1
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EXERCISE 22-11 (a) No entry necessary. Changes in estimates are treated prospectively. (b) Depreciation Expense.
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Class25 - Solutions - EXERCISE 22-6 (a) Depreciation to...

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