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Part 1 On October 1, 2014 The Han Solo Company purchased 4 assets as described below Millenium Falcon cost $950,000 life 11 years $70,000 salvage
Part 1 On October 1, 2014 The Han Solo Company purchased 4 assets as described below | |||||||
Millenium Falcon cost $950,000 life 11 years $70,000 salvage | |||||||
Jedi Sword cost $180,000 life 7 years salvage $12000 | |||||||
Speeder cost $50,000 life 8 years salvage $2000 | |||||||
Death Star cost $1,200,000 life 40 year salvage $100,000 mileage 1,000,000 miles | |||||||
Vadar elects to depreciate the Millenium Falcon using straight-line; the sword using double declining balance, | |||||||
the speeder using sum of the year's digits, and the Death Star units of activity: in 2014 Hand Solo drove the Death Star 25,000 miles | |||||||
in 2015 Han Solo drove the Death Star 150,000 miles | |||||||
REQUIRED; DETERMINE DEPRECIATION EXPENSE AND BOOK VALUE FOR EACH OF THE 4 ASSETS ON DECEMBER 31 2014 AND 2015 | |||||||
Part 2: | Using the information from part 1: In July 2014 Han Solo chose to use group/composite depreciation | ||||||
for the Falcon, the sword and the Speeder | |||||||
On January 1, 2015 Han Solo purchased a C3P0 unit for $600,000 which will belongs in the group/composite | |||||||
REQUIRED: DETERMINE DEPRECIATION EXPENSE FOR 2015 FOR THE GROUP OF ASSETS | |||||||
( you can ignore the Death Star for part 2) | |||||||
Part 3: IGNORE PART 2 WHEN DOING PART 3: GOING BACK TO PART 1: | |||||||
ON JANUARY 1, 2016 Han Solo spent $170000 adding a hyper-drive to the Millenium Falcon. , | |||||||
With this hyper-drive the Falcon will now last a total of 15 years instead of the original 11 years. | |||||||
REQUIRED: MAKE THE JOURNAL ENTRY Solo MAKES WHEN IT INSTALLS THE HYPER-DRIVE AND | |||||||
DETERMINE 2016 DEPRECIATION EXPENSE FOR THE MILLENIUM FALCON | |||||||
Part 4: | IGNORE PARTS 2 AND 3 WHEN DOING PART 4: GO BACK TO PART 1: | ||||||
ON JANUARY 1, 2016 the Jedi sword was stolen by The First Order. The insurance company gave Solo $125,000 for his stolen sword | |||||||
Make the journal entry on January 1st 2016 when the sword is stolen and the Lizard Insurance Company gives Solo the $125,000 | |||||||
(one journal entry incorporating both events is acceptable and preferred since the Lizard Insurance Company settles claims quickly) |
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