Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following information pertains to the equipment acquired by Xie Co. on January 1, 20x6. Use this information to answer parts (a), (b), and (c).

The following information pertains to the equipment acquired by Xie Co. on January 1, 20x6. Use this information to answer parts (a), (b), and (c). 

 

Required  

a. Determine the depreciation expense for the year ending December 31, 20x6, assuming the company uses the: 

i)  straight-line method 

ii) units-of-production method 

b. On January 1, 20x7, due to a preventative maintenance system that had been implemented, management felt that the total estimated life of the equipment would be 5 years with a total estimated production of 50,000 units. Accordingly, the estimates were revised. In 20x7, 12,000 units were produced. No change in estimated residual value was anticipated.

Determine the depreciation expense for the year ending December 31, 20x7, assuming the company uses the: 

i) straight-line method 

ii) units-of-production method On January 1, 20x8, the equipment was sold for $75,000. 

с. Prepare the journal entry to record the sale assuming the company uses the:

i) straight-line method 

ii) units-of-production method

Cost Estimated residual value Estimated life Estimated production 20x6 actual production $120,000 $ 20,000 4 years 40,000 units 9,000 units

Step by Step Solution

3.42 Rating (149 Votes )

There are 3 Steps involved in it

Step: 1

Solution Q a Depreciation expenses for 20x6 i Straight line method Depreciation expenses Cost residual value life of Equipment Depreciation expenses 120000 20000 4 Depreciation expenses 100000 4 Depre... 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

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0073379616, 73379611, 978-0697789938

More Books

Students also viewed these Accounting questions