Accumulated Depreciation is used to show the amount of cost expiration of intang
ID: 2481507 • Letter: A
Question
Accumulated Depreciation is used to show the amount of cost expiration of intangibles is the same as Depreciation Expense is a contra asset account is used to show the amount of cost expiration of natural resources A machine with a cost of $80,000 has an estimated residual value of $5,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 5.000 hours? $5,000 $25,000 15,000 $26,667 Equipment with a cost of $130,000 has an estimated residual value of $10,000 and an estimated life of 5 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours? $24,000 $32,500 $33,000 $35,750 A machine with a cost of $75,000 has an estimated residual value of $S,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double declining-balance method? $17,500 $37,500 $18,750 $ 6,667 The proper journal entry to purchase a computer on account on January 2 to be utilized within the business would be: Jan 2 Office Supplies 1,350 Accounts Payable 1.350 Jan 2 Office Equipment 1,350 Accounts Payable 1,350 Jan 2 Office Supplies 1,350 Accounts Receivable 1,350 Jan 2 Office Equipment 1,350 Accounts Receivable 1,350 The calculation for annual depreciation using the straight-line depreciation method is initial cost/estimated useful life depreciable cost/estimated useful life depreciable cost * estimated useful life initial cost * estimated useful lifeExplanation / Answer
Ans 65 c( Contra asset account One of the reason of having credit balance in an asset account is accumulated depreciation Aso credit balance in fixed asset account is contrary to normal so it is contra asset account Ans 66 Unit of production method Cost-Salavage value/Total No. of expected hours 80000-5000/15000 5 $5 per hour So for 5000 hours it is 5000*5 $25,000 Ands b Ans 67 Straight Line method Cost-Salavage value/Total No. of useful years 130000-10000/5 24000 Ans a Ans 68 Double Declining Method=Net Book value at the beginning of the year*200%*Depreciation rate Depreciable Rate=100/4=25% Year 1 Beginning Book Value 75000 Depreciation=75000*200%*25% 37500 Ending Book Value 37500 Year 2 Net book Value at the beginning 37500 Depreciation=37500*200%*25% 18750 Ans c Ans 69 Ans b Office Equipment Dr 1350 Accounts Payable 1350 Computer is an equipment so is dr under office equipment And it is purchased on account so accounts Payable Ans 70 Straight Line method B) Depreciable Cost/Estimated useful life