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School
Regent University **We aren't endorsed by this school
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ACCT FINANCIAL
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Accounting
Date
Nov 19, 2023
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3
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Question Answered step-by-step Asked by mdyaalqamzi Weller Express acquires a delivery truck at a cost of €42,000. The truck is expected to have a residual value of €9,000 at the end of its 5‐year useful life. Compute annual depreciation expense for the first and second years using the straight‐line method. BE9.6 Depreciation information for Weller Express is given in BE9.4. Assuming the declining‐ balance depreciation rate is double the straight‐line rate, compute annual depreciation for the first and second years under the declining‐balance method. BE9.7 Freemont Taxi Service uses the units‐of‐activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 150,000 miles. Taxi no. 10 cost €33,500 and is expected to have a residual value of €500. Taxi no. 10 is driven 36,000 mil es in year 1 and 22,000 miles in year 2. Compute the depreciation for each year. BE9.11 Prepare journal entries to record the following. Prepare entries for disposal by retirement . a. Matterhorn AG retires its delivery equipment, which cost CHF44,000. Accumulated depreciation is also CHF44,000 on this delivery equipment. No residual value is received. b. Assume the same information as (a), except that accumulated depreciation is CHF37,000, instead of CHF44,000, on the delivery equipment. BE9.12 Prepare entries for disposal by sale . Arma Ltd. sells equipment on September 30, 2020, for £20,000 cash. The equipment originally cost £72,000 and as of January 1, 2020, had accumulated depreciation of £42,000. Depreciation for the first 9 months of 2020 is £4,800. Prepare the journal entries to (a) update depreciation to September 30, 2020, and (b) record the sale of the equipment.
Answer & Explanation Solved by verified expert Rated Helpful Answered by SargentWillpower2133 Question: Depreciation Expense - Year 1 = €6,600 Depreciation Expense - Year 2 = €6,600 BE9.6 Depreciation Expense - Year 1 = €16,800 Depreciation Expense - Year 2 = €10,080 BE9.7 Depreciation Expense - Year 1 = €7,920 Depreciation Expense - Year 2 = €4,840 BE9.11 a) Accumulated Depreciation - Delivery equipment CHF 44,000 Delivery equipment CHF 44,000 b) Accumulated Depreciation - Delivery equipment CHF 37,000 Loss on Retirement of Delivery equipment CHF 7,000 Delivery equipment CHF 44,000 BE9.12 a) Depreciation Expense £4,800 Accumulated Depreciation £4,800 b) Accumulated Depreciation £46,800 Loss on disposal £5,200 Cash £20,000 Equipment £72,000 Step-by-step explanation Question: Annual Depreciation Expense = (42000 - 9000) / 5 = €6600 Depreciation Expense - Year 1 = €6600 Depreciation Expense - Year 2 = €6600 BE9.6
Straight line Depreciation rate = 100%/5 = 20% Declining‐balance depreciation rate = 20% X 2 = 40% Depreciation Expense - Year 1 = 42000 X 40% = €16,800 Depreciation Expense - Year 2 = (42000 - 16800) X 40% = €10,080 BE9.7 Depreciation rate per mile = (33500 - 500) / 150000 = €0.22 per mile Depreciation Expense - Year 1 = 36000 X 0.22 = €7,920 Depreciation Expense - Year 2 = 22000 X 0.22 = €4,840 BE9.11 a) Accumulated Depreciation - Delivery equipment CHF 44,000 Delivery equipment CHF 44,000 b) Accumulated Depreciation - Delivery equipment CHF 37,000 Loss on retirement of Delivery equipment CHF 7,000 Delivery equipment CHF 44,000 BE9.12 a) Depreciation Expense £4,800 Accumulated Depreciation £4,800 b) Total Accumulated Depreciation = 42000 + 4800 = £46,800 Accumulated Depreciation £46,800 Loss on disposal £5,200 Cash £20,000 Equipment £72,000
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