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  • Craus, Cindy C Acctg 323 Bsa - 3 "Depreciation Methods"

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    The document provides details on depreciation expense calculations for various assets for the year 2017. It includes depreciation amounts for a building, land improvements, automobiles/trucks, machinery/equipment, leasehold improvements, and a newly purchased automobile. The total depreciation expense for 2017 was $225,432.40. It also provides the carrying amount of a truck sold in September 2017, the total cost of machinery/equipment acquired in July 2017, and the book value of machinery/equipment as of December 31, 2017.

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    The document provides details on depreciation expense calculations for various assets for the year 2017. It includes depreciation amounts for a building, land improvements, automobiles/trucks, machinery/equipment, leasehold improvements, and a newly purchased automobile. The total depreciation expense for 2017 was $225,432.40. It also provides the carrying amount of a truck sold in September 2017, the total cost of machinery/equipment acquired in July 2017, and the book value of machinery/equipment as of December 31, 2017.

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    28 views2 pages

    Craus, Cindy C Acctg 323 Bsa - 3 "Depreciation Methods"

    Uploaded by

    Cindy Craus
    The document provides details on depreciation expense calculations for various assets for the year 2017. It includes depreciation amounts for a building, land improvements, automobiles/trucks, machinery/equipment, leasehold improvements, and a newly purchased automobile. The total depreciation expense for 2017 was $225,432.40. It also provides the carrying amount of a truck sold in September 2017, the total cost of machinery/equipment acquired in July 2017, and the book value of machinery/equipment as of December 31, 2017.

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    © All Rights Reserved
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    of 2

    Craus, Cindy C ACCTG 323

    BSA – 3
    “Depreciation Methods”

    1. Depreciation Expense for 2017


    a. Building
    Building, beg. Balance 1,200,000
    Less: Accumulated Depreciation (265,400)
    934,600
    Add: 1/6 Acquisition (600,000 x 80%) 480,000
    1,414,600
    1/25=0.04 x 150% = 6% 0.06
    Depreciation Expense 84,876.00

    b. Land improvements
    Land Improvement- beg. Balance 192,000
    Divided by: 12 years 12
    16,000
    Multiplied by .75
    Depreciation Expense 12,000

    c. Automobiles and trucks


    Book Value 1/1/17 (132,000 - 86,200) 45,800
    Less: Book Value on 1/1/17 of truck sold 9/30/17 (8,100 + 8,352) 10,452
    Amount subject to depreciation 35,348
    150% delivery balance rate (1/5 x 150%) .30
    Total 10,604.40
    Total Sold 9/30/17 2,352
    Depreciation Expense 12,956.40

    d. Machinery and Equipment


    (775,000 / 10 ) 77,500
    250,000/10 = 290,000 x 6/12 14,500
    Depreciation Expense 92,000

    e. Leasehold Improvements
    Book Value 1/1/2016 (221,000-110,500) 110,500
    UL of leasehold improvement (8-3) 5 years
    Depreciation Expense 22,100

    f. Automobile purchased on August 30, 2017


    New Automobile - Acquired 15,000
    Multiply by .30
    4,500
    Multiply by .33
    Depreciation Expense 1,500
    g. Total Depreciation Expense for 2017
    Depreciation Expense - Building 84,876
    Depreciation Expense - Land Improvements 12,000
    Depreciation Expense - Automobiles and Trucks 12,956.4
    Depreciation Expenes - MAchinery and Equip. 92,000
    Depreciaiton Expense - Leasehold Improvement 22,100
    Depreciation Expense - Automobile purchased 1,500
    Depreciation Expense for 2017 225,432.40

    2. What is the carrying amount on January 1, 2017, of the truck sold on September 30, 2017?
    Carrying Amount 8,100
    Depreciation for 9 mos. 2,352
    CA 1/1/17 10,452

    3. What is the total cost of the machinery and equipment acquired on July 1, 2017?
    Invoice cost 250,000
    Delivery cost 10,000
    Installation Cost 30,000
    Total cost 290,000

    4. What is the book value of the machinery and equipment on December 31, 2017?
    Machinery & Equipment 775,000
    Additional 290,000
    (92,000)
    (196,200)
    Book Value 776,800

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