Fernandez Corporation purchased a truck at the beginning of $2025$ for $$50,000.$ The truck is estimated to have a salvage value of $$2,000$ and a useful life of $160,000$ miles. It was driven $23,000$ miles in $2025$ and $31,000$ miles in $2026.$ Compute depreciation expense using the units$-$of$-$production method for $2025$ and $2026.$

BE$10\mathrm{.}2($LO $1)$ Lockard Company purchased machinery on January $1,2025,$ for $$80,000.$ The machinery is estimated to have a salvage value of $$8,000$ after a useful life of $8$ years. $($a$)$ Compute $2025$ depreciation expense using the straight$-$line method. $($b$)$ Compute $2025$ depreciation expense using the straight$-$line method assuming the machinery was purchased on September $1,2025.$

BE$10\mathrm{.}3($LO $1)$ Use the information for Lockard Company given in BE$10\mathrm{.}2.($a$)$ Compute $2025$ depreciation expense using the sum$-$of$-$the$-$years$-$digits method. $($b$)$ Compute $2025$ depreciation expense using the sum$-$of$-$the$-$years$-$digits method, assuming the machinery was purchased on April $1,2025.$

BE$10\mathrm{.}4($LO $1)$ Use the information for Lockard Company given in BE$10\mathrm{.}2.($a$)$ Compute $2025$ depreciation expense using the double$-$declining$-$balance method. $($b$)$ Compute $2025$ depreciation expense using the double$-$declining$-$balance method, assuming the machinery was purchased on October $1,2025.$

BE$10\mathrm{.}5($LO $1)$ Cominsky Company purchased a machine on July $1,2026,$ for $$28,000.$ Cominsky paid $$200$ in title fees and county property tax of $$125$ on the machine. In addition, Cominsky paid $$500$ shipping charges for delivery, and $$475$ was paid to a local contractor to build and wire a platform for the machine on the plant floor. The machine has an estimated useful life of $6$ years with a salvage value of $$3,000.$ Determine the depreciation base of Cominsky$$s new machine. Cominsky uses straight$-$line depreciation.

BE$10\mathrm{.}6($LO $1)$ Dickinson Inc. owns the following assets.

Asset

Cost

Salvage

Estimated Useful Life

A

$$70,000$

$$7,000$

$10$ years

B

$50,000$

$5,000$

$5$ years

C

$82,000$

$4,000$

$12$ years

Compute the composite depreciation rate and the composite life of Dickinson$$s assets.

BE$10\mathrm{.}7($LO $1)$ Holt Company purchased a computer for $$8,000$ on January $1,2024.$ Straight$-$line depreciation is used, based on a $5-$year life and a $$1,000$ salvage value. In $2026,$ the estimates are revised. Holt now feels the computer will be used until December $31,2027,$ when it can be sold for $$500.$ Compute the $2026$ depreciation.

BE$10\mathrm{.}8($LO $2)$ Jurassic Company owns equipment that cost $$900,000$ and has accumulated depreciation of $$380,000.$ The expected future net cash flows from the use of the asset are expected to be $$550,000.$ The fair value of the equipment is $$400,000.$ Prepare the journal entry, if any, to record the impairment loss.

BE$10\mathrm{.}9($LO $2)$ Use the information in BE$10\mathrm{.}8.$ Assume that the expected net cash flows are expected to be $$500,000.$ Prepare the journal entry, if any, to record the impairment loss.

BE$10\mathrm{.}10($LO $3)$ Everly Corporation acquires a coal mine at a cost of $$400,000.$ Intangible development costs total $$100,000.$ After extraction has occurred, Everly must restore the property $($estimated fair value of the obligation is $$80,000),$ after which it can be sold for $$160,000.$ Everly estimates that $4,000$ tons of coal can be extracted. If $700$ tons are extracted the first year, prepare the journal entry to record depletion.

BE$10\mathrm{.}11($LO $4)$ In its recent annual report, Campbell Soup Company reports beginning$-$of$-$the$-$year total assets of $$13,148$ million, end$-$of$-$the$-$year total assets of $$12,372$ million, total sales of $$8,691$ million, and net income of $$1,628$ million. $($a$)$ Compute Campbell$$s asset turnover. $($b$)$ Compute Campbell$$s profit margin on sales. $($c$)$ Compute Campbell$$s return on assets using $(1)$ asset turnover and profit margin and $(2)$ net income. $($Round to two decimal places.$)$

$*$BE$10\mathrm{.}12($LO $5)$ Francis Corporation purchased an asset at a cost of $$50,000$ on March $1,2025.$ The asset has a useful life of $8$ years and a salvage value of $$4,000.$ For tax purposes, the MACRS class life is $5$ years. Compute tax depreciation for each year $20252030.$

Exercises

E$10\mathrm{.}1($LO $1)$ A textbox reads, Excel. $($Depreciation Computations$$SL$,$ SYD$,$ DDB$)$Deluxe Ezra Company purchases equipment on January $1,$ Year $1,$ at a cost of $$469,000.$ The asset is expected to have a service life of $12$ years and a salvage value of $$40,000.$

Instructions

Compute the amount of depreciation for each of Years $1$ through $3$ using the straight$-$line depreciation method.

Compute the amount of depreciation for each of Years $1$ through $3$ using the sum$-$of$-$the$-$years$-$digits method.

Compute the amount of depreciation for each of Years $1$ through $3$ using the double$-$declining$-$balance method. $($In performing your calculations, round constant percentage to the nearest one$-$hundredth of a point and round answers to the nearest dollar.$)$