The company founder hires us as consultants and asks that we oversee the accounting for new equipment purchased on January 1 The founder wants to know the implications of different depreciation methods and estimates for the company's financial statements. Those statements will be used to attract financing from new investors and creditors. At the end of the equipment's first year in operation, we are given the following Tobleau Dashboard Estimated Useful Life of Assets Purchase Price & Estimated Salvage Value Building Equipment Truck 20 $70,000 16 $60,000 $50,000 12 $40,000 Years $30,000 $20,000 4 $10,000 $0 0 Purchase Salvage Purchase Salvage Purchase Salvage Price Value Price Value Price Value Building Equipment Truck Actual & Estimated Units-of-Production Year 1 Production Actual Year 2 Production Estimated Estimated Year 3 Production Estimated Year 4 Production 0 25,000 50,000 75,000 125,000 100,000 Total Units to be produced 1(a). Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year. 1(b). Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the depreciation for the second year given the revised useful life estimate. 2. At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $12,000 cash and (b) $6,000 cash. Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 2 Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year Book Value at the End of Year 1: Cost Accumulated depreciation of first year Book value at point of revision 1(a). Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year (b). Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the depreciation for the second year given the revised useful life estimate. 2. At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $12,000 cash and (b) $6,000 cash, Complete this question by entering your answers in the tabs below. Required LA Required 1B Required 2 Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute depreciation for the second year given the revised useful life estimate Revised Depreciation for Second Year Book value at point of revision Revised salvage value Remaining depreciable cost Years of life remaining Revised annual depreciation for second year Required 1A Required 1B Required 2 At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $12,000 cash and (b) $6,000 cash View transaction list Journal entry worksheet 2 1 Record the sale of equipment at the end of its useful life for $12,000 cash. Noter Enter debits before credits General Journal Debit Credit Transaction (a) Record entry Clear entry View general Journal Required 1A Required 18 Required 2 At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $12,000 cash and (b) $6,000 cash. View transaction list Journal entry worksheet
