1) At the beginning of 2017, BobCo acquired equipment costing $260,000. It was estimated that this equipment would have a useful life of 10 years and a salvage value of $15,000 at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year.

At the beginning of 2020 (the fourth year of the equipment's life), the company's engineers reconsidered their expectations and estimated that the equipment's useful life would probably be 15 years (in total) instead of 10 years. The estimated salvage value was not changed at that time. However, during 2028, the estimated salvage value was reduced to $5,000.

Instructions

Indicate how much depreciation expense should be recorded each year for this equipment, by completing the following table.

Show your computations in how you computed depreciation expense

Year Depreciation Expense Accumulated Depreciation NB Initial Installed Cost

1 2017 Salvage

2 2018 Depr Cost

3 2019 Useful life

4 2020 ANNUAL DEPR

5 2021 2020 NBV

6 2022 Salvage

7 2023 Depr Cost

8 2024 Useful Life

9 2025 ANNUAL DEPR

10 2026

11 2027 2028 NBV

12 2028 Salvage

13 2029 Depr Cost

14 2030 Useful Life

15 2031 ANNUAL DEPR

2) Sally Co. has equipment that cost $125,000 and that has been depreciated $85,000.

PREPARE THE JOURNAL ENTRIES REQUIRED FOR EACH OF THE FOLLOWING:

a) It was scrapped as having no value (A)

b) it was sold for $55,000 (B)

c) It was sold for $30,000 (C)

3) Patty Inc, purchased the following assets on January 1, 2019:

Name Cost Salvage Useful life Estimated unit life DEPR Method

Robot Welder 435,000 15,000 10 yrs 260,000 units/activity- see note 1

Super Computer1,250,000 100,000 7 YRS N/A 200% Declining Balance

LEAR JET 7,250,000 1,250,000 5 YRS N/A Straight Line

Instructions:For each asset prepare a table showing the following for each year the asset is depreciated: Annual Depreciation expense

Accumulated Depreciation

Net Book Value

(1) Units produced by the Robot Welder were as follows:

2018 25,000

2019 50,000

2020 10,000

2021 10,000

2022 15,000

2023 12,500

2024 -

2025 18,000

2026 22,000

2027 27,000

2028 45,000

2029 20,000

2030 10,000

Sally Co. has equipment that cost $125,000 and that has been depreciated $85,000. 5 6 Instructions PREPARE THE JOURNAL ENTRIES REQUIRED FOR EACH OF THE FOLLOWING: 8 (A) 9 (a) It was scrapped as having no value. 10 11 (b) It was sold for $55,000. 12 13 (c) It was sold for $30,000. (B) 14 15 16 17 18 19 (C) 20 21