Homeworksolution-ch.11

# Homeworksolution-ch.11 - EXERCISE 11-6(10-15...

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EXERCISE 11-6 (10-15 minutes) (a) (\$127,900 – \$14,069) = \$22,766/year 5 = \$22,766 X 5/12 = \$9,486 2008 Amortization — Straight line = \$9,486 (b) (\$127,900 – \$14,069) = \$5.42/hr. 21,000 2008 Amortization — Machine Usage = 800 X \$5.42 = \$4,336 (c) 2008: 40% X (\$127,900) X 5/12 = \$21,317 2009: 40% X (\$127,900 – \$21,317) = \$42,633 (d) 2008: 25% X (\$127,900) X 1/2 = \$15,988 2009: 25% X (\$127,900 – \$15,988) = \$27,978

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EXERCISE 11-16 (10-15 minutes) (a) No correcting entry is necessary because changes in estimate are handled in the current and prospective periods. (b) Revised annual charge: Book value as of 1/1/2009 [\$60,000 – (\$7,000 X 5)] = \$25,000 Remaining useful life = 5 years (10 years – 5 years) Revised residual value = \$4,500 (\$25,000 – \$4,500) ÷ 5 = \$4,100 Amortization Expense—Equipment. ........... 4,100 Accumulated Amortization— Equipment. .................................... 4,100 (c) Revised annual charge: Amortization rate = 2/8 = 25% Book value as of 1/1/2009 [\$60,000 X (1 – 25%) 5 ] = \$14,238 Remaining useful life = 5 years Revised amortization rate = 2/5 = 40% \$14,238 X 40% = \$5,695 Amortization Expense—Equipment. ........... 5,695 Accumulated Amortization— Equipment. .................................... 5,695
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Homeworksolution-ch.11 - EXERCISE 11-6(10-15...

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