Question
Question #1 Bob Company purchased equipment on January 1, 2011 for $80,000. It is estimated that the equipment will have a $8,000 salvage value at
Question #1
Bob Company purchased equipment on January 1, 2011 for $80,000. It is estimated that the equipment will have a $8,000 salvage value at the end of its 4-year useful life. It is also estimated that the equipment will produce 288,000 units over its 4-year life.
Respond to the following independent questions in the space provided for each question.
1. Compute the amount of depreciation expense for the year ended December 31, 2011, using
the straight-line method of depreciation.
2. If 44,000 units of product are produced in 2011 and 88,000 units are produced in 2012, what
is the book value of the equipment at December 31, 2012? The company uses the units-of-
activity depreciation method.
3. If the company uses the double-declining-balance-method of depreciation, what is the balance
of the Accumulated Depreciation-Equipment account at December 31, 2013?
Question #2
Bob earns a salary of $5,000 per month during the year. FICA taxes are 8% on the first $100,000 of gross earnings. Federal unemployment insurance taxes are 6.2% of the first $7,000; however, a credit is allowed equal to the state unemployment insurance taxes of 5.2% on the $7,000. During the year, $12,800 was withheld for federal income taxes and 6% of Bob
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started