Thuy E9-33, E10-32 - E9-33 1. • 2008 a. Straight-line:...

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Unformatted text preview: E9-33 1. • 2008 a. Straight-line: 26,000 - 1,000 Depreciation expense = = $5,000/ year 5 b. Units-of-production: 26,000 – 1,000 Depreciation expense = x 9,000 = $2,045 110,000 • 2009 a. Straight-line: , 26,000 - 1,000 Depreciation expense = = $5,000/ year 5 b. Units-of-production: 26,000 – 1,000 Depreciation expense = x 24,000 = $5,455 110,000 2. Units-of-production depreciation method in which the cost of an asset is allocated to each period on the basis of the productive output or use of the asset during the period is more closely reflects the used-up service potential of the car. In this method, cost – salvage is divided by the asset’s useful life measured in miles (not in years as in straight-line method) to acquire the average depreciation expense per mile, and then multiply by the usage for the year. E10-32 Operating lease: 2009 Jan. 2 Lease computer.......................................................4,141 Lease liability................................................................4,141 (To record leased asset) 2009 Dec. 31 Lease Expense........................................................4,141 Cash...............................................................................4,141 (To record annual lease of computer) Capital lease: 2009 Jan. 2 Leased computer.......................................................14,216 Leased liability...............................................................14,216 (5 payments at 14% is 3.4331. Leased a computer from for $ 4,141 a year for 5 years discounted at 14%: $ 4,141 x 3.4331 = 14,216) 2009 Dec. 31 Interest Expense......................................................1,990 Lease Liability.......................................................2,151 Cash...............................................................................4,141 (Paid annual lease payment for computer: $ 14,216 x 0.14 = 1,990; $ 4,141 - $ 1,990 = 2,151) ...
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This note was uploaded on 06/20/2011 for the course ECON 123 taught by Professor Mrews during the Spring '11 term at Korea Advanced Institute of Science and Technology.

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Thuy E9-33, E10-32 - E9-33 1. • 2008 a. Straight-line:...

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