Name: Assets_Depreciation_Six Questions
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Description

Chen Company completed the following transactions and events
involving its delivery trucks.

*2010*
Jan.	1	Paid $25,015 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and a $2,300 salvage value. Delivery truck costs are recorded in the Trucks account.
Dec.	31	Recorded annual straight-line depreciation on the truck.

*2011*
Dec.	31	Due to new information obtained earlier in the year, the truckâ€™s estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,850. Recorded annual straight-line depreciation on the truck.

*2012*
Dec.	31	Recorded annual straight-line depreciation on the truck.
Dec.	31	Sold the truck for $5,500 cash.

Required:

1.
Prepare journal entries to record these transactions and events
in the given order.

2.)

Saturn
Co. purchases a used machine for $288,000 cash on January 2 and readies it
for use the next day at an $8,000 cost. On January 3, it is installed on a
required operating platform costing $1,600, and it is further readied for
operations. The company predicts the machine will be used for six years and
have a $34,560 salvage value. Depreciation is to be charged on a
straight-line basis. On December 31, at the end of its fifth year in
operations, it is disposed of.

Required:
1.	Prepare journal entries to record the machine’s purchase and the costs to ready and install it. Cash is paid for all costs incurred.

2.	Prepare journal entries to record depreciation of the machine at December 31.

(a)	Its first year in operations.

(b)	The year of its disposal.

3.	Prepare journal entries to record the machineâ€™s disposal under each of the following separate assumptions

(a)	It is sold for $23,500 cash.

(b)	It is sold for $94,000 cash.

(c)	It is destroyed in a fire and the insurance company pays $34,000 cash to settle the loss claim.

3.)

Ming Yue Company pays $350,000 for real estate plus $18,550 in
closing costs. The real estate consists of land appraised at $218,400; land
improvements appraised at $62,400; and a building appraised at $239,200.

Allocate the total cost among the three purchased assets.(Round your percentage
answers to a whole number and other answers to the nearest dollar amount.
Omit the “$” and “%” signs in your response.)

Prepare the journal entry to record the purchase.

4.)

In early January 2011, LabTech purchases computer equipment for
$174,000 to use in operating activities for the next four years. It estimates
the equipmentâ€™s salvage value at $36,000.

Prepare a table showing depreciation and book value for each of
the four years assuming straight-line depreciation.(Omit the “$”
sign in your response.)

5.)

Millworks Company owns a milling machine that cost $126,700 and
has accumulated depreciation of $90,800. Prepare the entry to record the
disposal of the milling machine on January 5 under each of the following
independent situations.

1.

The machine needed extensive repairs, and it was not worth
repairing. Millworks disposed of the machine, receiving nothing in
return.(Omit
the “$” sign in your response.)

2.

Millworks sold the
machine for $15,600 cash.(Omit the “$” sign in your response.)

3.

Millworks sold the
machine for $35,900 cash.(Omit the “$” sign in your response.)

4.

Millworks sold the
machine for $41,900 cash.(Omit the “$” sign in your response.)

6.)

In
early January 2011, LabTech purchases computer equipment for $147,000 to use
in operating activities for the next four years. It estimates the equipmentâ€™s
salvage value at $30,000.

Prepare
a table showing depreciation and book value for each of the four years
assuming double-declining-balance depreciation. (Leave no cells blank – be certain to enter “0”
wherever required. Omit the “$” and “%” signs in your
respons

Assets_Depreciation_Six Questions

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