Accounting 2
Wholesale Hardware Consultants purchased a building for $ 354,000 and depreciated it on a straight-line basis over a 25-year period. The estimated residual value is $ 104,000. After using the building for 15 years, Wholesale realized that wear and tear on the building would wear it out before 25 years and that the estimated residual value should be $ 88000. Starting with the 16th year, Wholesale began depreciating the building over a revised total life of 20 years using the new residual value. Journalize depreciation expense on the building for years 15 and 16.
(Cost-Residiudal value)/Useful life = straightline depreciation Depreciation Expense - Building 10,000 Accumulated Depreciation - Building 10,000 To record depreciation on building Cost - accumulated depreciation = book value (Book value - residual value)/ revised useful life = revised depreciation Redpreciation expense - building accumlated depr. - building
Double declining balance depreciation
[(Cost - Accumulated depreciation) x DDB rate] x (number of months/12)= Double decling balance depreciation [($18,000-$7,200) x2 x (1/5)] x (9/ 12 ) =$3,240
copy machine cost 33,000 and has accumulated depreciation of 30,000. Get rid of machine and gets nothing. What is the result of the disposal transaction
Loss of 3,000
How should you record a capital expenditure? A. Debit a liability B. Debit an asset Your answer is correct.C. Debit an expense D. Debit capital
B
Which intangible asset is recorded only as part of the acquisition of another company? A. Franchise B. Goodwill Your answer is correct.C. Patent D. Copyright
B
Which method almost always produces the most depreciation in the first year? A. Straight-line B. Double-declining-balance Your answer is correct.C. Units-of-production D. All produce the same depreciation in the first year.
B
Which cost is not recorded as part of the cost of a building? A. Construction materials and labor B. Concrete for the building's foundation C. Annual building maintenance .D. Real estate commission paid to buy the building
C
Which method is used to compute depletion? A. Straight-line method B. Double-declining-balance method C. Units-of-production method Your answer is correct.D. Depletion method
C
