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Minicase 3: On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January
Minicase 3: On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January 1.
ACG 2021 Minicase 3 Minicase 3: On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January 1. Equipment Machine 1 Building #3 Salvage $5,000 $50,000 Date 2002 2004 Mine 316 Cost $65,000 $900,000 not including land $1,000,000 $0 2003 Mine 682 $500,000 $100,000 2001 Patent Truck 1 $50,000 $35,000 0 $3,000 2004 2004 Truck 2 $50,000 $5,000 2006 Truck 3 $75,000 $10,000 2001 Machine 2 $100,000 $5,000 2003 Created by M. Mari Fall 2007 Page 1 of 2 Life 5 25 1,000,00 0 tons 40,000 barrels 17 200,000 miles 150,000 miles 200,000 miles 10 Method of Depreciation DDB S/L 30,000 tons extracted 6,000 barrels extracted Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 Units of production, miles this year are 15,000 Units of production: total miles depreciated to date are 180,000 as of January 1, 2006. Miles in 2006 are 30,000 miles. S/L ACG 2021 Minicase 3 REQUIRED: Compute the depletion, amortization, and depreciation expense on December 31, 2006 for each asset listed above. Record the entries for the assets above Suppose that we sold machine 2 for $50,000, record the entry Suppose that the building life increased from 25 years to 30 years, revise the depreciation and prepare the entry. Suppose that the corporation spent $20,000 in 2006 to defend the patent. Record the entry. Created by M. Mari Fall 2007 Page 2 of 2 ACG 2021 Minicase 3 Minicase 3: On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January 1. Equipment Machine 1 Building #3 Salvage $5,000 $50,000 Mine 316 Cost $65,000 $900,000 not including land $1,000,000 Patent Truck 1 $50,000 $35,000 0 $3,000 Machine 2 $100,000 $5,000 $0 Life 5 25 1,000,00 0 tons 17 200,000 miles 10 Method of Depreciation DDB S/L 30,000 tons extracted Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 S/L REQUIRED: Compute the depletion, amortization, and depreciation expense on December 31, 2006 for each asset listed above. Record the depreciation journal entries for the assets above Suppose that Machine 1 was sold for $40,000 on 12/31/2008, record the entry. Suppose that the corporation spent $20,000 in 2006 to defend the patent. Record the entry. Created by M. Mari revised by Mr. Hortensi Fall 2007 Page 1 of 1 ACG 2021 Minicase 3 Minicase 3: On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January 1. Equipment Machine 1 Building #3 Salvage $5,000 $50,000 Mine 316 Cost $65,000 $900,000 not including land $1,000,000 Patent Truck 1 $50,000 $35,000 0 $3,000 Machine 2 $100,000 $5,000 $0 Life 5 25 1,000,00 0 tons 17 200,000 miles 10 Method of Depreciation DDB S/L 30,000 tons extracted Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 S/L REQUIRED: Compute the depletion, amortization, and depreciation expense on December 31, 2006 for each asset listed above. Record the depreciation journal entries for the assets above Suppose that Machine 1 was sold for $40,000 on 12/31/2008, record the entry. Suppose that the corporation spent $20,000 in 2006 to defend the patent. Record the entry. Created by M. Mari revised by Mr. Hortensi Fall 2007 Page 1 of 1 ACG 2021 Minicase 3 Minicase 3: On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record. Assume all assets were purchased on January 1. Equipment Machine 1 Building #3 Salvage $5,000 $50,000 Mine 316 Cost $65,000 $900,000 not including land $1,000,000 Patent Truck 1 $50,000 $35,000 0 $3,000 Machine 2 $100,000 $5,000 $0 Life 5 25 1,000,00 0 tons 17 200,000 miles 10 Method of Depreciation DDB S/L 30,000 tons extracted Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 S/L REQUIRED: Compute the depletion, amortization, and depreciation expense on December 31, 2006 for each asset listed above. Record the depreciation journal entries for the assets above Suppose that Machine 1 was sold for $40,000 on 12/31/2008, record the entry. Suppose that the corporation spent $20,000 in 2006 to defend the patent. Record the entry. Created by M. Mari revised by Mr. Hortensi Fall 2007 Page 1 of 1Step by Step Solution
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