Please explain parts A and B in P9-2A. Thank you! WileyPLUS: MyWileyPLUS | Help
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Please explain parts A and B in P9-2A. Thank you!
WileyPLUS: MyWileyPLUS | Help | Contact UsI Log Out WileyPLUS Weygandt, Financial Accounting, 10e FINANCIAL ACCT. (ACCT298) Home Read, Study& Practice Assignment Gradebook ORION Downloadable cTextbook Read, Study & Practice> Chapter 9. Plant Assets, Natural Resource Select a Section Select a PULL SCREEN pRINTERVEns10N BACK Land $172,500 Buildings $735,000 P9-2A Compute depreciation under different methods (LO 2) In recent years, Avery Transportation purchased three used buses. Because of frequent tumover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is shown as follows. Bus Acquired Cost $ 96,000 110,000 92,000 Salvage Value S 6,000 10,000 8,000 Useful Life in Years Depreciation Method Straight-line Declining-balance Units-of-activity 4 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 2018, 24,000; 2019, 34,000; and 2020, 30,000. Instructions Compute the amount of accumulated depreciation on each bus at December 31, 2019. Bus 2, 2018, $82,500 If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2017 and (2) 2018? (a) (b) P9-3A Compute depreciation under different methods (LO 1. 2) On January 1, 2019, Evers Company purchased the following two machines for use in its production process. lPrivacy Policy2000-2017 John Wiley & Sons Inc. All Rights Reserved. A Division of John Wiley & Sons Inc Version 4.24.2.4Explanation / Answer
1- Straight line depreciation method
Straight le depreciation =(cost-residual value)/useful life
96,000-6,000/5= $18,000
Accumulated depreciation (end of 19)=18,000+18,000+18000= $ 54,000
Double declining balance method
Depreciation rate=100%/life *2
100/4*2=50%
Dep.exp.for year 2017=110,000*50%= $ 55,000
Dep.exp.for year 2018=55,000*50%=27,500
Dep.exp.for year 2019=27,500*50%13,250
Declining balance method
Depreciation rate =100%/asset useful life
100/4=25%
Dep.exp.for 2017=110,000*25%=27500
.exp.for 2018=110,000-27500*25%=20625
Dep.exp.for 2019=82500-20625*25%=15468
Units of activity method
Depreciation cost per unit=92000-8000/120,000=0.7
2018 depreciation exp=0.7*24000=16,800
2019 depreciation =0.7*34000=23800
2020 depreciation =0.7*30,000=21000
Accumulated depreciation =16800+23800+21000=61,600
2- Bus 2 was purchased on April instead January
Dep.exp. for 2017=110,000*50%=55,000*9/12=41,250
Dep.for 2018=110,000-41250=68,750
68,750*50%=34,375