Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Part A) Jimmy Motels Inc. owns a motel that it had purchased on January 1, 2023, for $1.5 million cash and is accounted for in

Part A)

Jimmy Motels Inc. owns a motel that it had purchased on January 1, 2023, for $1.5 million cash and is accounted for in a separate account, classified as "Buildings." The company is using the revaluation model to account for its structures and revalues them annually. Jimmy Motels Inc. uses straightline depreciation over the asset's 15-year useful life with no residual value. The asset's fair value was equal to its carrying amount on Dec. 31, 2023, and was $1,450,000 on Dec. 31, 2024.

Required: Assuming Jimmy Motels Inc. uses the asset adjustment (elimination) method for revaluation, prepare all required journal entries for 2023 and 2024.

Part B)

Required: Answer each of the following independent scenarios.

1. On January 2, 2022, a machine was purchased for $180,000. It has an estimated useful life of ten years and an estimated residual value of $14,000. Depreciation for 2023, using the double-declining-balance method, is $______.

2. A vehicle purchased for $50,000 has an estimated useful life of five years and a residual value of $3,800. It is expected to be driven 210,000 kilometres over its useful life. The asset was driven 45,000 kilometres in the second year. Depreciation for the second year, using the units of production method, is $______.

3. A machine costing $72,000, with an estimated useful life of five years and a residual value of $12,000, is depreciated by the straight-line method. This asset is sold for $50,000 at the end of the second year of use. The gain or loss on the disposal is $______.

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

Fundamentals Of Cost Accounting

Authors: Michael W Maher, William N. Lanen, Madhav V. Rajan

1st Edition

0073018376, 978-0073018379

More Books

Students also viewed these Accounting questions

Question

What AICPA guidance specifically addresses Audit Data Analytics?

Answered: 1 week ago

Question

7 Describe the role of an HR business partner

Answered: 1 week ago

Question

5 Explain the concept of the psychological contract.

Answered: 1 week ago