1. A truck with a cost of $82,000 has an estimated residual value of $16,000, an estimated useful life of 12 years, and is depreciated by the straight-line method. (a) Determine the amount of the annual depreciation, (b) Assuming that at the start of the eighth year the remaining life is estimated to be six years and the residual value is estimated to be $12,000, determine the depreciation expense for each of the remaining six years, (c) explain why depreciation is recalculated in situations like this.

2. Equipment was acquired at the beginning of the year at a cost of $465,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 15 years and an estimated residual value of $45,000.

What was the depreciation for the first year?

Assuming the equipment was sold at the end of the eighth year for $235,000, determine the gain or loss on the sale of the equipment.

Journalize the entry to record the sale.

3. Glacier Mining Co. acquired mineral rights for $494,000,000. The mineral deposit is estimated at 475,000,000 tons. During the current year, 31,500,000 tons were mined and sold.

Determine the depletion rate.

Determine the amount of the depletion expense for the current year.

Journalize the adjusting entry on December 31 to record the depletion expense.

Why is depletion taken on mineral rights?

4. On December 31, it was estimated that goodwill of $6,000,000 was impaired. In addition, a patent with an estimated useful economic life of 12 years was acquired for $1,500,000 on April 1.

Journalize the adjusting entry on December 31 for the impaired goodwill.

What is goodwill?

What does it mean for goodwill to be impaired?

Journalize the adjusting entry on December 31 for the amortization of the patent rights.

Why are patents and other intangible assets amortized?