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BE9-8 Calculate partial-year straight-line depreciation.
(LO 2) AP
Pandora Pants Company acquires a delivery truck on April 6, 2017, at a cost of $38,000. The truck is expected to have a residual value of $6,000 at the end of its four-year
life. Pandora uses the nearest month method to pro-rate depreciation expense. Calculate annual depreciation expense for the first and second years using straight-line
depreciation, assuming Pandora has a calendar year end.
BE9-9
D
Calculate partial-year diminishing-balance depreciation.
(LO 2) AP
Refer to the data given for Pandora Pants Company given in BE9-8. Assume now that the company has a policy of recording a half-year's depreciation in the year of
acquisition and a half-year's depreciation in the year of disposal. Using the double diminishing-balance method, calculate the depreciation expense for each year of the
equipment's life.
BE9-10 Determine carrying amount and record impairment loss.
(LO 3) AP
Cherry Technology purchased equipment on January 4, 2015, for $250,000. The equipment had an estimated useful life of six years and a residual value of $10,000. The
company has a December 31 year end and uses straight-line depreciation. On December 31, 2017, the company tests for impairment and determines that the equipment's
recoverable amount is $100,000. (a) Calculate the equipment's carrying amount at December 31, 2017 (after recording the annual depreciation). (b) Record the impairment
loss.
BE9-11 Calculate revised depreciation.
(LO 3) AP
On January 2, 2017, Ares Enterprises reports balances in the Equipment account of $32,000 and Accumulated Depreciation-Equipment account of $9,000. The
equipment had an original residual value of $2,000 and a 10-year useful life. Ares uses straight-line depreciation for equipment. On this date, the company decides that the
equipment has a remaining useful life of only four years with the same residual value. Calculate the revised annual depreciation.

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BE9-8 First Year - 2017$6,000.00 Second Year - 2018$8,000.00 BE9-9 Year 1... View the full answer

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BE9-8
WORKINGS
First Year - 2017
6,000.00
((38000-6000)/4)*9/12
Second Year - 2018
8,000.00
((38000-6000)/4)
On the First year we pro-rate the annual depreciation for 9 months only counting from...

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BE9-9
Acquisitos Cost
$ 250,000.00
Less: Residual Value
$ (10,000.00]
Depreciable Amount
$ 240,000.00
Divided by Life:
6
Depreciation per year
$
40,000.00
x Life used (2015 to 2017)
3
Accumulated...

BE9-8: Partial year-Straight line Depreciation Year 1(Dec 31,... View the full answer

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