Question - Lockard Company purchased machinery on January 1, 2012, for $142,080. The machinery is estimated to have a salvage value of $14,208 after a useful life of 8 years.
(a) Compute 2012 depreciation expense using the straight-line method.
(b) Compute 2012 depreciation expense using the straight-line method assuming the machinery was purchased on September 1, 2012.
Question - Lockard Company purchased machinery on January 1, 2012, for $90,160. The machinery is estimated to have a salvage value of $9,016 after a useful life of 8 years.
(a) Compute 2012 depreciation expense using the double-declining-balance method.
(b) Compute 2012 depreciation expense using the double-declining-balance method assuming the machinery was purchased on October 1, 2012.
Question - Agazzi Company purchased equipment for $332,740 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $23,200. Estimated production is 40,200 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 580 hours and the equipment produces 1,000 units.
Compute depreciation expense under each of the following methods. Agazzi is on a calendar-year basis ending December 31.
(a) Straight-line method for 2012
(b) Activity method (units of output) for 2012
(c) Activity method (working hours) for 2012
(d) Sum-of-the-years'-digits method for 2014
(e) Double-declining-balance method for 2013
Question - Machinery purchased for $125,840 by Carver Co. in 2008 was originally estimated to have a life of 8 years with a salvage value of $9,680 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2013, it is determined that the total estimated life should be 10 years with a salvage value of $10,890 at the end of that time. Assume straight-line depreciation.
(a) Prepare the entry to correct the prior years' depreciation, if necessary.
(b) Prepare the entry to record depreciation for 2013.