Chapter 9 HW - Student Name: Ankita Shah Class: Financial...

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Student Name: Ankita Shah Class: Financial Accounting Brief Exercise Problem # 9.2 Purchase price: $12,000 Salvage (residual) Value: $2,000 Estimated useful life: 5 years Depreciation method: Straight Line Depreciation exp. amount per yr: $2,000 (Purchase price - Salvage value / Useful life) Accum. Depr. for 3 yrs: $6,000 ($2,000 x 3) Netbook value at the end of 3 yrs: $6,000 (Purchase price - Accumulated depreciation) $1,200 (Cash received for sale of asset - Net book value) Exercise Problem # 9.2 # Capital Expenditure a) X b) X c) X d) X e) X f) X Exercise Problem # 9.6 Purchase price: $90,000 Residual Value: $18,000 Intial estimated useful life: 12 years Revised est. useful life: 20 years Depreciation amount: $72,000 (Purchase price - Residual value) Depreciation per year: $6,000 (Depr. Amt / useful life) $24,000 (Depr. Amt per yr x 4, 2004 to 2007) $66,000 (Purchase price - Accum. Depr.) Revised Depreciation amt: $48,000 (Purchase price - Residual value - Accum. Depr. as of Rev. Depr. Amt per year: $3,000 (Rev. Depr amt / remaining useful life) A) Gain / Loss on asset: Revenue Expenditure Accumulated Depreciaiton as of December 31st, 2007: Net Book Value at December 31st, 2007:
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Journal Entries in chronological order 1 Purchase of the machinery Jan. 11, 2004 Machinery……………………………. . $90,000 Cash…………………………………. . $90,000 To record purchase of Machinery Dec. 31, 2004 Depreciaiton Expense…………………… $6,000 Accumulated Depreciation - Machinery…. $6,000 To record depreciation expense for 2004 Dec. 31, 2005 Depreciaiton Expense…………………… $6,000 Accumulated Depreciation - Machinery…. $6,000 To record depreciation expense for 2005 Dec. 31, 2006 Depreciaiton Expense…………………… $6,000 Accumulated Depreciation - Machinery…. $6,000 To record depreciation expense for 2006 Dec. 31, 2007 Depreciaiton Expense…………………… $6,000 Accumulated Depreciation - Machinery…. $6,000 To record depreciation expense for 2007 Dec. 31, 2008 Depreciaiton Expense…………………… $3,000 Accumulated Depreciation - Machinery…. $3,000 To record depr. exp. for 2008, change in useful life from 12 to 20 yrs
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This note was uploaded on 12/13/2009 for the course ACCOUNTING ACCTG 50 taught by Professor B during the Fall '09 term at University of Phoenix.

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Chapter 9 HW - Student Name: Ankita Shah Class: Financial...

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