Business Accounting Assignments and Solutions | Desklib

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Business Accounting
Assignment
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Question BE 10-2
Expenditures in regards to purchase the truck
Cash price = $30,000
Accident insurance = $2,000
Sale taxes = $2,100
Motor vehicle license = $100
Painting and lettering = $400
Cost of truck =?
Cost of truck ¿ ∑ (Cash price+¿ Saletaxes+ Painting∧lettering) ¿
¿ 30,000+2,100+ 400
¿ $ 32,500
Hence, the cost of truck would be $32,500.
Question BE 10- 3
Flaherty Company’s journal entries for the two transactions are shown below:
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Question BE 10-4
Depreciation through straight line method
Straight depreciation = (38000-6000)/4 = $ 8000 per year
Question BE 10-6
Depreciation through double declining method
Straight line depreciation rate = 100 / 4 = 25%
Double decline rate = 2*25% = 50%
First year depreciation = $38000*50% = $19,000
Second year depreciation = $19000*50% = $9,500
Question BE 10-7
Depreciation rate = (39500-500)/150000 = 0.26 per mile
First year depreciation = $30000*0.26 = $7,800
Second year depreciation = $20000*0.26 = $5,200
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Question E 10-6
(a) Depreciation expense for 2017 through straight line method
Annual depreciation = ($150,000 - $12,000)/5 = $27,600
Depreciation expense for 2017 = 27,600 * (3/12) = $6,900
(b) Depreciation for 2017 through units of activity method
Depreciation per hour = ($150,000 - $12,000)/10000 = $13.8 per hour
Depreciation for 2017 = 13.8 * 1700 = $23,460
(c) Depreciation for 2017 through double declining balance method
 Depreciation expense for 2017
Straight line depreciation rate = 100 * (1/5) = 20%
Depreciation expense for first year [Oct’17 to Oct’18] = 2*20%*$150,000 = $60,000
Depreciation expense for first year [Oct’17 to Oct’18] = 2*20% *($150,000 -$60000) = $36,000
Hence,
Depreciation expense for 2017 =$60000 *(3/12) = $15,000
 Depreciation expense for 2018
Depreciation expense [Jan’17 to Sept’18] = $60,000 *(9/12) = $45,000
Depreciation expense [Oct’18 to Dec’18] = $36000 * (3/12) = $9,000
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Depreciation expense for 2018 = $45,000 + $9,000 = $54,000
Question E 10- 7
(a) Depreciation expense for 2017 and 2018
(1) Straight line method (SLM)
Depreciation expense (SLM) = ($34,000 -$2,000)/8 = $4,000
Depreciation expense on delivery truck through SLM for year 2017 is $4,000 and for year 2018
is $4,000.
(2) Units of activity method
Depreciation expense on delivery truck through units of activity method for year 2017 is $4,800
and for year 2018 is $3,840.
(3) Double declining balance method
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Double declining balance rate = 2* ((100%)/ (8 year)) = 25%
(b) Let Linton has used straight line method (SLM)
(1) Journal entry to record depreciation for year 2017
(2) Amount of delivery truck that would be recorded on December 31, 2017.
Question E 10-8
(a) Revised annual depreciation for each asset for the year 2017
(b) Entries to record depreciation on building for the year 2017
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Question E 10-9
Question E 10- 10
Depreciation = (Original cost – Salvage value)/ Useful life
¿ ( 65000−5000 )
5 =$ 12,000
Depreciation for 2014-2016 = 12000 * 3 = $36,000
Jan 1, 2017: Book value = 65000 – 36000 = $29,000
(a) January 1, 2017 sale for $31,000
(b) May 1, 2017 sale for $31,000
Depreciation = $12000/3 = $4000
Book value on May 1, 2017 = ($65000)-((12000*3) +4000) = $25,000
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(c) January 1, 2017 sale for $11,000
(d) October 1, 2017 sale for $11,000
Question E 10-2 A
Total miles = 120,000
(a) Amount of accumulated depreciation on each bus at December 31, 2017
Depreciation expense per mile ¿ 92000−8000
120000 =$ 0.70 per mile
Depreciation on rate (Bus 2) = (1/5)*2 = 40%
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(b) If bus 2 was purchased on April 1 rather than January 1, then depreciation expense for
bus (1) 2015 and (2) 2016.
Depreciation expense (Bus 2) for year 2015 = ($120,000) *0.4 *(9/12) = $36,000
Depreciation expense (Bus 2) for year 2015 = ($120,000-$36,000) *0.4 = $33,600
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