On January 1, 2010, Penaji Corporation acquired equipment costing $66,400. It was estimated at that time that this equipment would have a useful life of eight years and a residual value of $2,800. The straight-line method of depreciation is used by the company for its equipment, and its year end is December 31. At the beginning of 2012 (the beginning of the third year of the equipments life), the companys engineers reconsidered their expectations. They estimated that the equipments useful life would more likely be six years in total, instead of the previously estimated eight years.

Calculate the equipments accumulated depreciation and carrying amount at the beginning of 2012 immediately before the change in useful life.

Equipments accumulated depreciation	$
Carrying amount	$

Would you expect Penajis depreciation expense to increase or decrease in 2012 after the change in useful life? decreaseincrease

Should the company treat the change in useful life retroactively or only for current and future periods? retroactivelycurrent and future periods

If Penaji had not revised the equipments remaining useful life at the beginning of 2012, what would its total depreciation expense have been over the equipments life? What would have been the accumulated depreciation and carrying amount at the end of the equipments useful life?

Total depreciation expense	$
Accumulated depreciation	$
Carrying amount	$

Zafar Corporation purchased a presentation podium for $4,680. The company planned to keep it for four years, after which it was expected to be sold for $480.

Calculate the depreciation expense for each of the first three years under: (1)Straight-line method.

Year 1	$
Year 2	$
Year 3	$

(2)Double diminishing-balance method.

Year 1	$
Year 2	$
Year 3	$

Assuming Zafar sold the podium for $1,330 at the end of the third year, calculate the gain or loss on disposal under each depreciation method.

Straight-line method	$	GainLoss
Double diminishing-balance method	$	GainLoss

Determine the impact on profit (total depreciation of the table plus any loss on disposal or less any gain on disposal) of each method over the entire three-year period.

Straight-line method $

Double diminishing-balance method$

Ellette Limited purchased packaging machine on March 27, 2012, at a cost of $121,800. Management is contemplating the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other packaging machine. The new packaging machine has an estimated residual value of $2,100 and an estimated useful life of either three years or 30,800 units. Demand for the products produced by the packaging machine is sporadic so the packaging machine will be used in some years more than others. Assume the packaging machine produces the following number of units each year: 7,830 units in 2012; 10,540 units in 2013; 9,740 units in 2014; and 2,690 units in 2015. Ellette Limited has a December 31 year end.

Prepare separate depreciation schedules for the life of the packaging machine using:(Round depreciation per unit to 2 decimal places, e.g. 5.26. and answers to the nearest whole dollar, e.g. 5,275.) Straight-line method

Year	Depreciable Cost	Depreciation Expense	Accumulated Depreciation	Carrying Amount
2012	$	$	$	$
2013
2014
2015

Double diminishing-balance method

Year	Depreciable Cost	Depreciation Expense	Accumulated Depreciation	Carrying Amount
2012	$	$	$	$
2013
2014
2015

Units-of-production method

Year	Units-of-Production	Depreciation Expense	Accumulated Depreciation	Carrying Amount
2012	$	$	$	$
2013
2014
2015

Compare the total depreciation expense and accumulated depreciation under each of the three methods over the life of the packaging machine.(Round all answers to the nearest whole dollar, e.g. 5,275.) Straight- Line Units-of- Production Double Diminishing- Balance Total depreciation expense $ $ $ Accumulated depreciation

Sugden Limited purchased land and a building on August 1, 2011, for $579,600. The company paid $211,200 in cash and signed a 5% bank loan payable for the balance. The bank loan is due April 1, 2013. At that time, Sugden estimated that the land was worth $346,800 and the building $232,800. The building was estimated to have a 40-year useful life with a $18,000 residual value. The company has a December 31 year end and uses the straight-line depreciation method for buildings. The following are related transactions and adjustments during the next three years:

2011
Dec. 31	Recorded the annual depreciation.
31	Paid the interest owing on the bank loan.
2012
May 21	Paid $1,970 for repairs to the roof.
Dec. 31	Recorded the annual depreciation.
31	Paid the interest owing on the bank loan.
31	The land and building were tested for impairment. The land had a recoverable amount of $290,300 and the building $258,700.
2013
Mar. 31	Sold the land and building for $462,000 cash$259,800 for the land and $202,200 for the building.
Apr. 1	Paid the bank loan and interest owing.

Record the above transactions and adjustments for each year.(Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round all answers to the nearest whole dollar, e.g. 5,275. If no entry is required, select "No entry Required" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
2011
Aug. 1
Dec. 31
31
2012
May 21
Dec. 31
31
31
31
2013
Mar. 31
31
Apr. 1

SHOW LIST OF ACCOUNTS

Assume instead that the company sold the land and building on March 31, 2013, for $650,800 cash$396,300 for the land and $254,500 for the building. Record the journal entry (or entries) to record the sale.(Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all answers to the nearest whole dollar, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Mar. 31