1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. Round your answers to the nearest whole dollar a. Straight-line method Accumulated Depreciation, End of Year Year Depreciation Expense Book Value, End of Year $ 1 S $ 2 3 4 5 b. Double-declining-balance method Accumulated Depreciation, End of Year Year Depreciation Expense Book Value, End of Year $ 1 S $ 2 3 4 5 New lithographic equipment, acquired at a cost of $843 200 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of S94.860. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $140.199. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. Round your answers to the nearest whole dollar. 2. Journalize the entry to record the sale assuming that the manager chose the double-declining-balance method.* 3. Journalize the entry to record the sale in (2) assuming that the equipment was sold for $93,349 instead of $140, 199.* *Refer to the chart of accounts for the exact wording of the account titles CNOW journals do not use lines for journal explanations Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 2. On March 4, the entry to record the sale assuming that the manager chose the double-declining balance method. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW joumals will automatically indent a credit entry when a credit amount is entered. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 3. On March 4, the entry to record the sale in (2) assuming that the equipment was sold for $93,349 instead of S140,199. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debitor credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 ASSETS REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner's Capital 311 Owner's Drawing
