Journal Starting Questions Instructions Chart of Accounts Instructions New Ithographic equipment, acquired at a cost of $859,200 on March 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $96.880. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining balance method was selected In the first week of the fifth year, on March 4, the equipment was sold for $141.422. 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 Ind (b) the double-declining-balance method. Round your answers to the nearest whole dollar 2. Joumalize the entry to record the sale assuming the manager chose the double-declining-balance method. Refer to the Chart of Accounts for exact wording of account titles. 3. Journaltze the entry to record the sale in (2), assuming that the equipment was sold for $96.962 instead of $141,422. Refer to the Chart of Accounts for exact wording of account titles s Chart of Accounts CHART OF ACCOUNTS del 590 General Ledger ma ASSETS REVENUE In 110 Cash 410 Sales 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment 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 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 & Chart of Accounts wwwpVUI e 130 Mineral Rights 131 Accumulated Depletion 531 Rent Expense 532 Depreciation Expense-Equipment 91 ma 132 Goodwill 133 Patents 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense LIABILITIES 710 Interest Expense 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends Starting Questions Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each you, 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 me newest whole dollar. Enter al amowits as a positive numbers a. Straight-line method Accumulated Depreciation, End of Year Year Depreciation Expense $ 1 Book Value, End of Year s 1 2 3 4 5 b. Double-declining balance method Accumulated Depreciation, End of Year Year Book Value, End of Year Depreciation Expense $ 1 2 1 $ 2 3 4 5 b. Double-declining-balance method I Accumulated Depreciation, End of Year Year Depreciation Expense Book Value, End of Year 1 s $ 2 3 4 5 Journal 2. On March 4. joumalize the entry to record the sale assuming the manager chose the double-declining balance method. Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 2 3 3. On March 4. journalire the entry to record the sale in (2), assuming that the equipment was sold for $98,962 instead of $141,422. Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL ACCOUNTING EQUATION DESCRIPTION DATE POST. REF DEBIT ASSETS CREOUT EQUITY LIANUITIES 1 4
