XACC
291 Week 4 Individual Exercises and Problems
E9-5 E9-6 P9-2A
Complete Problems P9-2A.
Submit as a Microsoft® Excel® or Word document.
(b) Prepare a depreciation schedule assuming actual mileage was: 2011, 26,000; 2012, 32,000; 2013, 25,000; and 2014, 17,000.
(a) Straight-line for 2011.
(b) Units-of-activity for 2011, assuming machine usage was 1,700 hours.
(c) Declining-balance using double the straight-line rate for 2011 and 2012.
P9-2A In recent
years, Juresic Transportation purchased three used buses. Because of frequent turnover
in the accounting department, a different accountant selected the depreciation
method for each bus, and various methods were selected. Information concerning
the buses is summarized below.
1 1/1/09 $ 96,000 $ 6,000 5 Straight-line
2 1/1/09 120,000 10,000 4 Declining-balance
3 1/1/10 80,000 8,000 5 Units-of-activity
(b) If bus no. 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2009 and (2) 2010?
(b) Prepare a depreciation schedule assuming actual mileage was: 2011, 26,000; 2012, 32,000; 2013, 25,000; and 2014, 17,000.
Resource:Ch. 9
of Financial Accounting
Complete
ExercisesE9-5 & E9-6.Complete Problems P9-2A.
Submit as a Microsoft® Excel® or Word document.
E9-5 Younger Bus Lines uses the
units-of-activity method in depreciating its buses. One bus was purchased on
January 1, 2011, at a cost of $168,000. Over its 4-year useful life, the bus is
expected to be driven 100,000 miles. Salvage value is expected to be $8,000.
Instructions
(a) Compute the
depreciation cost per unit.(b) Prepare a depreciation schedule assuming actual mileage was: 2011, 26,000; 2012, 32,000; 2013, 25,000; and 2014, 17,000.
E9-6 Kelm Company purchased a new machine on
October 1, 2011, at a cost of $120,000.The company estimated that the machine
will have a salvage value of $12,000. The machine is expected to be used for
10,000 working hours during its 5-year life.
Instructions
Compute the depreciation expense under the following methods
for the year indicated.(a) Straight-line for 2011.
(b) Units-of-activity for 2011, assuming machine usage was 1,700 hours.
(c) Declining-balance using double the straight-line rate for 2011 and 2012.
Salvage Useful
Life Depreciation
Bus Acquired Cost Value in
Years Method1 1/1/09 $ 96,000 $ 6,000 5 Straight-line
2 1/1/09 120,000 10,000 4 Declining-balance
3 1/1/10 80,000 8,000 5 Units-of-activity
For the declining-balance method, the company uses the
double-declining rate. For the units-of activity method, total miles are
expected to be 120,000. Actual miles of use in the first 3 years were: 2010,
24,000; 2011, 34,000; and 2012, 30,000.
Instructions
(a) Compute the
amount of accumulated depreciation on each bus at December 31, 2011.(b) If bus no. 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2009 and (2) 2010?
TUTORIAL PREVIEW
E9-5(b) Prepare a depreciation schedule assuming actual mileage was: 2011, 26,000; 2012, 32,000; 2013, 25,000; and 2014, 17,000.
|
Computation
|
End of Year
|
||||||
|
Year
|
Units of
Activity
|
X
|
Depreciation
Cost /Unit
|
=
|
Annual
Depreciation
Expense
|
Accumulated
Depreciation
|
Book
Value
|
|
2011
|
26,000
|
X
|
$1.60
|
=
|
$41,600
|
$ 41,600
|
$126,400
|
|
2012
|
32,000
|
X
|
1.60
|
=
|
51,200
|
92,800
|
75,200
|
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