Homeworksolution-ch.11

Homeworksolution-ch.11 - EXERCISE 11-6 (10-15 minutes)...

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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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This note was uploaded on 10/18/2010 for the course BUS ACC415 taught by Professor Bibijohn during the Spring '09 term at Seneca.

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Homeworksolution-ch.11 - EXERCISE 11-6 (10-15 minutes)...

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