Round all numbers to 2 decimal places. Assume 360 day years / 30 day months/ nearest interval of 5 days, as learned in class. Assume Billy Bob and his girlfriend use a calendar year and recognize depreciation on December 31 of each year. You can round journal entries and final answers to the nearest dollar if you like. Make sure you show ALL your work and attach it to this sheet! On March 11, 2019, Billy Bob got a new girlfriend and wanted to impress her. Therefore, he went out and paid $70,000 for a Corvette. B. Bob estimates that his Corvette will have a salvage value of $15,000 at the end of its 8-year useful life. A) What is the book value of the car on January 1, 2023 if Billy Bob uses straight-line depreciation? B) What is the book value of the car on January 1, 2023 if Billy Bob uses double- declining balance (DDB) deprecation? C) What would Billy Bob's journal entries look like if he sold the car for $40,000 on October 26, 2021 using straight-line deprecation? On October 26, 2021, Billy Bob's girlfriend dumped B. Bob and wanted to celebrate, so she bought a Mercedes-Benz for $85,000. She estimates that her car will last 16 years and have a salvage value of $29,000 at the end of its 16-year life. D) What is the book value of her car on January 1, 2023 if B. Bob's ex-girlfriend uses straight-line depreciation? E) What is the book value of her car on January 1, 2029 if B. Bob's ex-girlfriend uses double-declining balance (DDB) depreciation? F) What would B. Bob's ex-girlfriends journal entries look like if she sold her car for $45,000 on October 26, 2037 using DDB depreciation? D, E, F S-L $85,000 - $29,000/16 = $3.500 Beg BV 2021 $85,000 65/360 2022 $84,368.06 2023 $80,868.06 Depr Exp $631 94 $3,500.00 Accur Depr $631 94 $4,131 94 End BV 584,368 06 $80,868.06 DDB 100%/16 = 6.25% x 2 = 12.5% Beg BV 65/360 2021 $85,000 12.5% 2022 $83,081 60 12.5% 2023 $72.696.40 12.5% 2024 $83,609,35 12.5% 2025 $55,658.18 12.5% 2026 $48,700.91 12.5% 2027 $42,613 29 125% 2028 $37.286.63 12.5% 2029 $32,625.80 12.5% 2030 529,000.00 125% 2031 $29.000.00 12.5% 2032 329,000.00 125% 2033 $29,000.00 12.5% 2034 529,000.00 12.5% 2035 $29,000.00 12.5% 2036 329,000.00 12.5% 2037 $29,000.00 125% Depr Exp $1.918.40 $10.385.20 $9.08705 $7.951.17 $6,957 27 $6,087 61 $5,326.66 $4,660.83 $3,625,80 $0.00 $0.00 50.00 S000 $0.00 $0.00 30.00 $0.00 Accum Depo $1,918.40 $12 303.60 $21 390.65 529 341 82 $36,299.09 $42 388.71 $47.713.37 $52.374 20 $56,000.00 $56,000.00 $58,000.00 356,000.00 $56.000.00 $56,000.00 556,000.00 $56,000.00 $56.000.00 End BV $83,081,50 $72,696.40 $63.609.35 $55,658 18 $48,700.91 $42,613.29 $37.286.63 $32,625.80 $29.000.00 $29,000.00 $29,000.00 $29,000.00 $29,000.00 $29,000.00 $29,000.00 $29.000.00 $29,000.00 PLUG 45.000 55.000 Cash Accumulated Depreciation - Equipma Equipment Gain on Salo 85.000 16.000 No initial entry needed since depreciation is zero
