Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Part 1 On Jan.1, 2012, Banana Democracy placed into service a lift truck that had a capitalized acquisition cost of $22,500, estimated useful life of

Part 1

On Jan.1, 2012, Banana Democracy placed into service a lift truck that had a capitalized acquisition cost of $22,500, estimated useful life of 16 years, and estimated salvage value of $2,500. Banana depreciated the truck on a straight-line basis until June 30, 2020, then sold the used lift truck for $8,475. Accumulated depreciation on the sale date was $10,625. What is the amount of gain or loss that Banana should recognize? Enter a positive number for a gain or a negative number (-xx) for a loss.

Part 2

On Jan 1 2018, Maria's Bodega purchased a van for making deliveries to customers. Cash payments on that date are $17,500 to the seller of the van, $670 in sales taxes, $875 in insurance coverage through June 30, and $550 for license plates to operate the truck through December 31, On Jan 2 Maria pays $2,500 to a body shop to paint lettering on the van and install custom warming ovens. Maria expects to use the van for 12 years and estimates its salvage value at the time will be $2,000 . What amounts should be capitalized as the acquisition of the van?

Part 3

On Jan. 1, 2016, Acme Industries put into service a milling machine that had a capitalized acquisition cost of $22,800, a useful life of 6 years, and an estimated salvage value of $0 (zero). Annual depreciation expense was calculated as $3,800/yr on a straight -line basis. On Jan. 1, 2020, Acme revises the total useful life estimate to 8 years. What is Acme's annual depreciation expense for the machine in 2020?

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

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Lawrence A. Tomassini

4th Edition

0072994029, 9780072994025

More Books

Students also viewed these Accounting questions

Question

How would you describe ModCloths segmentation strategy?

Answered: 1 week ago