Willow Creek Company purchased and installed carpet in its new general offices on July 30 for a total cost of $6,528. The carpet is estimated to have a 8-year useful life and no residual value. a. Prepare the journal entry necessary for recording the purchase of the new carpet. July 30 Carpet v 6,528 V Cash v 6,528 V Feedback V Check My Work Is this purchase improving or extending the life of the asset? Or is this purchase something that will only benefit this period? b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek uses the straight-line method. Do not round intermediate calculations. Dec. 31 Depreciation Expense-Carpet 476 X Accumulated Depreciation-Carpet 476 X

Willow Creek Company purchased and installed carpet in its new general offices on July 30 for a total cost of $6,528. The carpet is estimated to have a 8-year useful life and no residual value. a. Prepare the journal entry necessary for recording the purchase of the new carpet. July 30 Carpet v 6,528 V Cash v 6,528 V Feedback V Check My Work Is this purchase improving or extending the life of the asset? Or is this purchase something that will only benefit this period? b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek uses the straight-line method. Do not round intermediate calculations. Dec. 31 Depreciation Expense-Carpet 476 X Accumulated Depreciation-Carpet 476 X

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Description: Willow Creek Company purchased and installed carpet in its new general offices on July 30 for a total cost of $6,528. The carpet is estimated to have a 8-year useful life and no residual value.a. Prepare the journal entry necessary for recording the

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter9: Depreciation (deprec)

Section: Chapter Questions

Problem 5R: A truck was recently purchased for 75,000 with a salvage value of 5,000 and an estimated useful life...

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willow Creek Company purchased and installed carpet in its new gereral offces on Juiy 30 for a total cost of s5,s28. The carpet is estimated to have a 8-year useful life and no residual value. a. Prepare the journal entry necessary for recording the purchase of the new carpet. Julv 30 Carpet v 6.521 Cash 6.520 Feedhack Cheok My uk Is this purchase improving or extending the life of the asset? Or is this purchase something that will only benefit this period? b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that willon Creek uses the straight-line method. Do not round intermediate calculations.
A truck was recently purchased for 75,000 with a salvage value of 5,000 and an estimated useful life of eight years or 150,000 miles (24,000 miles per year for the first five years and 10,000 miles per year after that). Enter the new information in the Data Section of the worksheet. Again, make sure the totals for all three methods are in agreement. Print the worksheet. Save this new data as DEPREC5.
To test your formulas, assume the machine purchased had an estimated useful life of three years (20,000, 30,000, and 50,000 hours, respectively). Enter the new information in the Data Section of the worksheet. Does your depreciation total 320,000 under all three methods? There are three common errors made by students completing this worksheet. Lets clear up two of them. One, an asset that has a three-year life should have no depreciation claimed in Year 4. This can be corrected using an =IF statement in Year 4. For example, the correct formula in cell C32 is =IF(B32D9,0,(D7D8)/D9) or =IF(B32D9, 0, SLN(D7, D8, D9)). You may wish to edit what you have already entered rather than retype it. Two, as mentioned in requirement 2, the double-declining-balance calculation needs to be modified in the last year of the assets life. Assuming you have already modified the formula for Year 4 (per instructions in step 2), alter the formula for Year 3 also. If you corrected any formulas, test their correctness by trying different estimated useful lives (between 3 and 8) in cell E9. Then reset the Data Section to the original values, save the revised file as DEPREC2, and reprint the worksheet to show the correct formulas. The third common error doesnt need to be corrected in this problem. The general form of the double-declining-balance formula needs to be modified to check the net book value of the asset each year to make sure it does not go below salvage value. =DDB does this automatically, but if you are writing your own formulas, this gets very complicated and is beyond the scope of the problem.
IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.
Santa Rosa recently purchased a new boat to help ship product overseas. The following information is related to that purchase: Purchase price $4,500,000 Cost to bring boat to production facility $25,000 Yearly insurance cost $25,000 Annual maintenance cost of $30,000 Received 8% discount on sales price Determine the acquisition cost of the boat, and record the journal entry needed.
When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.
Ronson recently purchased a new boat to help ship product overseas. The following information is related to that purchase: purchase price $4,500,000 cost to bring boat to production facility $15,000 yearly insurance cost $12,000 pays annual maintenance cost of $22,000 received a 10% discount on sales price Determine the acquisition cost of the boat and record the journal entry needed.
Calculate the following: The first year of depreciation on a residential rental building costing $250,000 purchased June 2,2019. $_____________ The second year (2020) of depreciation on a computer costing $5,000 purchased in May 2019, using the half-year convention and accelerated depreciation considering any bonus depreciation taken. $______________ The first year of depreciation on a computer costing $2,800 purchased in May 2019, using the half-year convention and straight-line depreciation with no bonus depreciation. $______________ The third year of depreciation on business furniture costing $10,000 purchased in March 2017, using the half-year convention and accelerated depreciation but no bonus depreciation. $______________
Santa Rosa recentiy purchased a new boat to help ship product overseas. The following information is related to that purchase: Purchase price $4,100,000 Cost to bring boat to production facility $29,000 Yearly insurance cost $29,000 Annual maintenance cost of $40,000 Received 6% discount on sales price A. Determine the acquisition cost of the boat. $ 4,375,000 X Feedback Check My Work Remember that any costs incurred in the process of acquiring an asset and making it ready for its intended use can be capitalized as part of the value of the asset. Any other costs that maintain the asset during its use are standard expenses (not capitalized). B. Record the journal entry needed. If an amount box does not require an entry, leave it blank. Вoat 4,375,000 X Cash 4,375,000 X
Milliken uses a digitally controlled “dyer” for placing intricate and integrated patterns on manufactured carpet squares for home and commercial use. It is purchased on April 1 for $350,000. It is expected to last 8 years and have a salvage value of $30,000. a. What is the MACRS-GDS property class? b. Determine the depreciation deduction during each year of the asset’s 8-year life. c. Determine the unrecovered investment at the end of each of the 8 years.
Title Prepare journal entries for each of the following transactions or events for Liu Cybersystems: Description Journal entries for depreciation and amortization expense Prepare journal entries for each of the following transactions or events for Liu Cybersystems: (a) Acquired computers costing $800 000 and software costing $80 000 on 1 January 2011. Liu expects the computers to have a service life of 10 years and $80 000 residual value. The software is expected to have a service life of four years and zero residual value. (b) Paid $40 000 to install the computers at Liu’s office. Paid $20 000 to test the software. (c) Liu records depreciation and amortization expense for the computers and the computer software using the straight-line method for 2011 and 2012.
Determining asset cost, preparing depreciation schedules (3 methods), and identifying depreciation results that meet management objectives On January 3, 2018, Rapid Delivery Service purchased a truck at a cost of $100,000. Before placing the truck in service, Rapid spent $3,000 painting it, $600 replacing tires, and $10,400 overhauling the engine. The truck should remain in service for five years and have a residual value of $12,000. The truck’s annual mileage is expected to be 32,000 miles in each of the first four years and 8,000 miles in the fifth year—136,000 miles in total. In deciding which depreciation method to use, Andy Sargeant, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Requirements Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. Rapid prepares financial…