Mastery Problem: Long-Term Assets: Fixed and Intangible Patterson Planning Corp. Depreciation Final Questions Patterson Planning Corp. You have been hired by Patterson Planning Corp., an events planning company that recently had a fire in which some of the accounting records were damaged. In reviewing the fixed asset records, you find three depreciation schedules that are not labeled. They are listed in the following table. One of the assets has a depreciation rate of $4.30 per hour. Year Schedule A Schedule B Schedule C 1 $6,000.00 $10,125.00 $8,600.00 2 3,600.00 13,500.00 6,450.00 3 2,160.00 13,500.00 7,310.00 4 1,296.00 13,500.00 6,450.00 5 444.00 3,375.00 4,300.00 6 6,880.00 7 4,730.00 8 Total $13,500.00 $54,000.00 $44,720.00 Depreciation Shaded cells have feedback. 1. Determine which depreciation method is shown in each schedule on the Patterson Planning Corp. panel. Then match each schedule to the asset description that best characterizes the type of assets often depreciated using that method. Asset Description Depreciation Schedule Used Asset generating greater revenues in the early years Asset with variable in-service time Asset producing steady revenues B Points: 3/3 Feedback 2. For each of the depreciation schedules shown on the Patterson Planning Corp. panel, fill in the following information. Leave any cells blank that cannot be determined from the depreciation schedule. A B Useful life Residual value $5,400 X $ $ Asset cost $ $ $ Total operating hours Points: 6/12 Feedback Final Questions Shaded cells have feedback. Review the depreciation schedules on the Patterson Planning Corp. panel, then answer the following questions. more years of life remaining, but with a residual value that was $2,500 1. How would you adjust Schedule B if, at the beginning of Year 3, the asset was estimated to have higher? The total depreciation for this asset now will be $ The depreciation amount for Year 3 will be $ Points: 0/2 2. What is the difference between the journal entries for discarding or selling a fixed asset? The journal entry to discard a fixed asset differs from the other entry because there is no receipt of cash Points: 2/2 3. Complete the following sentences about depreciation. (A) When a fixed asset is fully depreciated it is kept in the ledger It has not been removed from service . (B) The balance of the Accumulated Depreciation account represents the total amount that has been depreciated V. (C) Depreciation measures the transfer of the cost of a fixed asset to expense Points: 4/4 Feedback Mastery Problem: Long-Term Assets: Fixed and Intangible Patterson Planning Corp. Depreciation Final Questions Patterson Planning Corp. You have been hired by Patterson Planning Corp., an events planning company that recently had a fire in which some of the accounting records were damaged. In reviewing the fixed asset records, you find three depreciation schedules that are not labeled. They are listed in the following table. One of the assets has a depreciation rate of $4.30 per hour. Year Schedule A Schedule B Schedule C 1 $6,000.00 $10,125.00 $8,600.00 2 3,600.00 13,500.00 6,450.00 3 2,160.00 13,500.00 7,310.00 4 1,296.00 13,500.00 6,450.00 5 444.00 3,375.00 4,300.00 6 6,880.00 7 4,730.00 8 Total $13,500.00 $54,000.00 $44,720.00 Depreciation Shaded cells have feedback. 1. Determine which depreciation method is shown in each schedule on the Patterson Planning Corp. panel. Then match each schedule to the asset description that best characterizes the type of assets often depreciated using that method. Asset Description Depreciation Schedule Used Asset generating greater revenues in the early years Asset with variable in-service time Asset producing steady revenues B Points: 3/3 Feedback 2. For each of the depreciation schedules shown on the Patterson Planning Corp. panel, fill in the following information. Leave any cells blank that cannot be determined from the depreciation schedule. A B Useful life Residual value $5,400 X $ $ Asset cost $ $ $ Total operating hours Points: 6/12 Feedback Final Questions Shaded cells have feedback. Review the depreciation schedules on the Patterson Planning Corp. panel, then answer the following questions. more years of life remaining, but with a residual value that was $2,500 1. How would you adjust Schedule B if, at the beginning of Year 3, the asset was estimated to have higher? The total depreciation for this asset now will be $ The depreciation amount for Year 3 will be $ Points: 0/2 2. What is the difference between the journal entries for discarding or selling a fixed asset? The journal entry to discard a fixed asset differs from the other entry because there is no receipt of cash Points: 2/2 3. Complete the following sentences about depreciation. (A) When a fixed asset is fully depreciated it is kept in the ledger It has not been removed from service . (B) The balance of the Accumulated Depreciation account represents the total amount that has been depreciated V. (C) Depreciation measures the transfer of the cost of a fixed asset to expense Points: 4/4 Feedback