Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Feng Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $42,300. The machine's useful

1. Feng Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $42,300. The machine's useful life is estimated at 10 years, or 363,000 units of production. It has a $6,000 residual value. During its second year, the machine produces 35,000 units. Determine the machine's second-year depreciation under the straight-line method.

2. Using the above information, determine the machine's second-year depreciation using the units of production method.

3. Using the above information, determine the machine's second-year depreciation using the double decline balance method.

4. On April 1, 2014, Stone's Backhoe Company purchases a new machine for $250,000. The machine is expected to last five years, and have a residual value of $25,000. Compute the depreciation expense for both 2014, and 2015 assuming the company uses the straight-line method.

5. Using the information above, compute the depreciation expense for both 2014 and 2015 assuming the company uses the double decline balance method.

6. GBSB pays $440,000 for real estate plus $23,320 in closing costs. The real estate consists of land appraised at $180,400, land improvements at $82,000, and a building appraised at $147,6000. Allocate the total cost among the three purchased assets.

7. GBSB Manufacturing purchases a large lot on which an old building is located as part of its plans to build a new campus. The negotiated purchase price is $252,000 for the lot plus $147,000 for the old building. GBSB pays $27,600 to tear down the old building and $40,800 to fill and level the lot. It also pays a total of $1,494, 751 in construction costs - this amount consists of $1,406,000 for the new building and $88,751 for lighting and paving a parking area next to the building.

Prepare journal entries to record these costs incurred by GBSB, all of which are paid in cash.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

e. What do you know about your ethnic background?

Answered: 1 week ago

Question

b. Why were these values considered important?

Answered: 1 week ago