On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,060,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 130,000 560,000 180,000 190,000 $ 1,060,000 Estimated Residual Value N/A none 12% of cost $ 15,000 Estimated Useful Life (in years) N/A 25 8 10 On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $106,000 was sold for $86,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles, Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024. 2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2025, and the sale of equipment. 3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2025. Required 11 Required 2 Required 3 Complete this question by entering your answers in the tabs below.

On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,060,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 130,000 560,000 180,000 190,000 $ 1,060,000 Estimated Residual Value N/A none 12% of cost $ 15,000 Estimated Useful Life (in years) N/A 25 8 10 On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $106,000 was sold for $86,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles, Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024. 2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2025, and the sale of equipment. 3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2025. Required 11 Required 2 Required 3 Complete this question by entering your answers in the tabs below.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...

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On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.
Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $900,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 150,000 400,000 200,000 150,000 $ 900,000 Estimated Residual Value N/A none 12% of cost $ 15,000 Estimated Useful Life (in years) N/A 25 On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $90,000 was sold for $70,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required 1 Required 2 Required 3 Building Equipment Vehicles Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024. 2. Prepare the journal entries to record the depreciation on the…
Following are the details related to fixed assets of Jackson company as at December 31, 2022: Date of Residual Purchase January 1, 2020 $15,000 April 1, 2015 1,000 Asset Machinery Delivery Van September 30, 2018 Furniture 500 December 31, 2012 Building 25,000 Required: Estimated Useful Life 30 Years 12 Years 8 Years 40 Years Cost $ 550,000 45,000 72,000 1,250,000 Value 1. Calculate the annual depreciation for each of the fixed assets given above. 2. Determine the book value of each fixed asset as on December 31, 2022.
On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $920,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Useful Life Asset Land $ 140,000 Building Equipment Vehicles Total Cost 420,000 Estimated Residual Value N/A none (in years) N/A 25 206,000 154,000 10% of cost $ 14,000 6 10 $ 920,000 On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $92,000 was sold for $72,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024. 2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2025, and the sale of equipment. 3.…
On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,070,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 135,000 570,000 170,000 195,000 $ 1,070,000 Estimated Residual Value N/A none 12% of cost $ 15,000 Estimated Useful Life (in years) N/A 20 On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $107,000 was sold for $87,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required 1 Required 2 Required 3 Building 8 Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024. 2. Prepare the journal entries to record the depreciation on the equipment sold on…
t December 31, 2020, Grand Company reported the following as plant assets.Land $ 4,000,000Buildings $28,500,000Less: Accumulated depreciation—buildings 12,100,000 16,400,000Equipment 48,000,000Less: Accumulated depreciation—equipment 5,000,000 43,000,000 Total plant assets $63,400,000During 2021, the following selected cash transactions occurred.April 1 Purchased land for $2,130,000.May 1 Sold equipment that cost $750,000 when purchased on January 1, 2017. The equipment was sold for $450,000.June 1 Sold land purchased on June 1, 2011 for $1,500,000. The land cost $400,000.July 1 Purchased equipment for $2,500,000.Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 2011. The company received no proceeds related to salvage.Instructions c. Prepare the plant assets section of Grand’s balance sheet at December 31, 2021.
On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,090,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 145,000 590,000 155,000 200,000 $ 1,090,000 Estimated Residual Value N/A none 12% of cost $ 16,000 Required 1 Estimated Useful Life (in On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $109,000 was sold for $89,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. years). N/A 20 10 118 Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024 2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2025, and the…
At December 31, 2027, Flint Corporation reported the following plant assets. Land $4,068,000 Buildings $26,700,000 Less: Accumulated depreciation-buildings 16,170,300 10,529,700 Equipment 54,240,000 Less: Accumulated depreciation-equipment 6,780,000 47,460,000 Total plant assets $62,057,700 During 2028, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,983,200. May 1 Sold equipment that cost $813,600 when purchased on January 1, 2021. The equipment was so June 1 Sold land for $2,169,600. The land cost $1,356,000. July 1 Purchased equipment for $1,491,600. Dec. 31 Retired equipment that cost $949,200 when purchased on December 31, 2018. No salvage val (a) Prepare a tabular summary that includes the plant asset accounts and balances shown on the December 31, 2 · Decreases in assets, liabilities, or stockholders' equity require a negative sign or parentheses. -Increases in expenses and losses require a negative sign or parentheses. Increases in Accumulated…
he plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020: Plant Asset Accumulated Depreciation Land $510,000 - Land Improvements 260,000 61,000 Building 2,300,000 366,000 Equipment 1,190,000 421,000 Automobiles 230,000 128,000 Transactions during 2021 were as follows: On January 2, 2021, equipment were purchased at a total invoice cost of $340,000, which included a $7,100 charge for freight. Installation costs of $43,000 were incurred. On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $35,000. The fair value of the building on the day of the donation was $22,500. On May 1, 2021, expenditures of $66,000 were made to repave parking lots at Pell’s plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn’t provide future benefits beyond those originally…