On December 31, 2013, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January 1.
| Equipment |
Cost |
Salvage |
Date |
Life |
Method of Depreciation |
| Machine 1 |
$65,000 |
$5,000 |
2012 |
5 |
DDB |
| Building #3 |
$900,000 not including land |
$50,000 |
2004 |
25 |
S/L |
| Mine 316 |
$1,000,000 |
$0 |
2010 |
1,000,000
tons |
30,000 tons extracted |
| Mine 682 |
$500,000 |
$100,000 |
2011 |
40,000
barrels |
6,000 barrels extracted |
| Patent |
$50,000 |
0 |
2010 |
17 |
|
| Truck 1 |
$35,000 |
$3,000 |
2010 |
200,000
miles |
Units of production: total miles
depreciated to date are 60,000 as
of January 1, 2006. Miles this year
30,000 |
| Truck 2 |
$50,000 |
$5,000 |
2009 |
150,000
miles |
Units of production, miles this
year are 15,000 |
| Truck 3 |
$75,000 |
$10,000 |
2008 |
200,000
miles |
Units of production: total miles
depreciated to date are 180,000
as of January 1, 2006. Miles in
2006 are 30,000 miles. |
| Machine 2 |
$100,000 |
$5,000 |
2003 |
10 |
S/L |
REQUIRED:
Compute the depletion, amortization, and depreciation expense on December 31, 2013 for each asset listed above.
Record the entries for the assets above
Suppose that we sold machine 2 for $50,000, record the entry
Suppose that the building life increased from 25 years to 30 years, revise the depreciation and prepare the entry.
Suppose that the corporation spent $20,000 in 2013 to defend the patent. Record the entry.