Natural Resources, and Intangible Assets Instructions Analyze the foregoing transactio transaction in the Item column, and then insert the amounts in the other appropriate columns. For amounts entered in the Other Accounts column, also indicate the account titles. ns using the following column headings. Insert the number of each Item Land Buildings Other Accounts O 2) In recent years, Avery Transportation purchased three used buses. Because of t turnover in the accounting department, a different accountant selected the depreciation for each bus, and various methods were selected. Information concerning the buses is P9.2A (L frequen method shown as follows. Salvage Useful Life Cost Value in Years Depreciation Method Bus Acquired 1/1/18 $ 96,000 6,000 Straight-line Declining-balance Units-of-activity 10,000 110,000 8,000 92,000 For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total miles are expected to be 120,000. Actual miles of use in the first 3 years were 2019,24,000; 2020, 34,000; and 2021, 30,000. Instructions a. Compute the amount of accumulated depreciation on each bus at December 31, 2020 b. If Bus 2 was purchased on April 1 instead of January 1, what is the depreciation expense for this bus in (1) 2018 and (2) 2019? P9.3A (LO 1, 2) On January 1, 2020, Evers Company purchased the following two machines for use in its production process. The cash price of this machine was $48,000. Related expenditures included: sales tax $1,700, shipping costs $150, insurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery dur- ing its first year of operations. Evers estimates that the useful life of the machine is 5 years with a $5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Machine A: Machine B: The recorded cost of this machine was $180,000. Evers estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period. Instructions a. Prepare the following for Machine A. 1. The journal entry to record its purchase on January 1, 2020 2. The journal entry to record annual depreciation at December 31, 2020. b. Calculate the amount of depreciation expense that Evers should record for Machine B each year of its useful life under the following assumptions. 1. Evers uses the straight-line method of depreciation. 2. Evers uses the declining-balance method. The rate used is twice the straight-line rate. 3. Evers uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2020, 45,000 units; 2021, 35,000 units; 2022, 25,.000 units; and 2023, 20,000 units c. Which method used to calculate depreciation on Machine B reports the highest amount of deprecia- tion expense in year 1 (2020)? The highest amount in year 4 (2023)? The highest total amount over he 4-vear period
