Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On December 31, 2019, Vail Company owned the following assets: Asset Date of Cost Accumulated Life in Residual Purchase Depreciation Years Value Building 1/1/2017 $50,000

On December 31, 2019, Vail Company owned the following assets:

Asset

Date of

Cost

Accumulated

Life in

Residual

Purchase

Depreciation

Years

Value

Building 1/1/2017 $50,000 $3,750(a) 40 $0
Office machinery 1/1/2017 20,000 9,760(b) 10 2,000
Office fixtures 1/1/2017 30,000 20,000(c) 5 5,000

(a) Straight-line depreciation; (b) Double-declining-balance depreciation; (c) Sum-of-the-years-digits depreciation

Vail computes depreciation and amortization expense to the nearest whole year. During 2020, Vail engaged in the following transactions:

Jan. 3 Extended the building at a cost of $30,000. The extension provided an addition to the service potential of the building. Vail paid cash for the building extension.
Mar. 7 Sold a piece of office machinery that had originally cost $4,000 and that had accumulated depreciation of $1,952 on December 31, 2019. The machine was sold for $3,000.
May 17 Purchased office fixtures and office machinery for $9,200. The supplier reduced the price because of the joint purchase. If purchased separately, the office fixtures would have cost $6,000 and the office machinery $4,000. Delivery costs paid by Vail were $200. The machinery was accidentally damaged during installation and cost $230 to repair. The office fixtures have an estimated life of 5 years and a residual value of $250. The office machinery has an estimated life of 10 years and a residual value of $500.
Aug. 10 Exchanged the presidents desk (classified as office fixtures) for a larger desk belonging to a friend of the president. The desk had cost $600 and had accumulated depreciation on December 31, 2019, of $400 and an estimated residual value of $100. The new desk had a value of $900 and $700 cash was paid.
Oct. 20 Serviced and adjusted the office machinery at a cost of $125.
Required:
3. Prepare an Accumulated Depreciation account for each category of assets, enter the beginning balance, post the journal entries from Requirement 2, and compute the ending balance.

image text in transcribed

3. Prepare an Accumulated Depreciation account for each category of assets, enter the beginning balance, post the journal entries from Requirement 2, and compute the ending balance 1. Check the accuracy of the accumulated depreciation balances at December 31, 2019. Enter the confirmed balance for each asset category in the Accumulated Depreciation as of 12/31/19 column of the following table. 2. Post the journal entries from Requirement 2 and compute the ending balance. Additional Instruction Accumulated Depreciation 2020 Accumulated Depreciation Asset Type as of 12/31/19 Depreciation Expense Disposals as of 12/31/20 Building $ $ $ $ Office machinery $ $ $ $ Office fixtures $ $ $ $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What The Numbers Mean

Authors: David H. Marshall, Wayne William Mcmanus, Daniel Marshall Viele, Mcmanus Marshall, Daniel F. Viele

10th Edition

1259060705, 978-1259060700

More Books

Students also viewed these Accounting questions