2. In its balance sheet at December 31, 2017 , Gangnam Style Equestrian Supplies
ID: 2535897 • Letter: 2
Question
2. In its balance sheet at December 31, 2017, Gangnam Style Equestrian Supplies Corp. reported the office equipment as:
3. Calculate the following amounts relative to the office furniture as they would appear in the 2018 financial statements of Gangnam Style Equestrian Supplies Corp. using the straight-line method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2018 (1 point)
The carrying value of the office equipment at December 31, 2018 (1 point)
4. During 2017, the machinery produced 82,000 units. Calculate the following amounts relative to the machinery as they would appear in the 2017 financial statements of Gangnam Style Equestrian Supplies Corp. using the units-of-output method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2017 (1 point)
The carrying value of the machinery at December 31, 2017 (1 point)
5. During 2018, the machinery produced 98,000 copies. Calculate the following amounts relative to the machinery as they would appear in the 2018 financial statements of Gangnam Style Equestrian Supplies Corp. using the units-of-output method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2018 (1 point)
The carrying value of the machinery at December 31, 2018 (1 point)
6. Calculate the following amounts relative to the computers as they would appear in the 2017 financial statements of Gangnam Style Equestrian Supplies Corp. using the double-declining balance method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2017 (1 point)
The carrying value of the computers at December 31, 2017 (1 point)
7. Calculate the following amounts relative to the computers as they would appear in the 2018 financial statements of Gangnam Style Equestrian Supplies Corp. using the double-declining balance method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2018 (1 point)
The carrying value of the computers at December 31, 2018 (1 point)
8. Calculate the following amounts relative to the computers as they would appear in the 2019 financial statements of Gangnam Style Equestrian Supplies Corp. using the double-declining balance method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2019 (1 point)
The carrying value of the computers at December 31, 2019 (1 point)
AMOUNT
Depreciation expense for the year ended December 31, 2018 (1 point)
The carrying value of the office equipment at December 31, 2018 (1 point)
Problem #6: Depreciation (18 points) In this problem, you must present supporting calculations when applicable to receive full and partial credit. Correct answers given WITHOUT proper support will receive a minimum of a two-point The following information was extracted from the accounting records of Gangnam Style Equestrian Supplies Corp. at December 31, 2017: Estimated Date Acquired Estimated Useful Life Historic Residual Cost Depreciation Method Straight-line Units-of-Output Double-Declining Balance Value Office Furniture 1/2/2017$27,500 Machinery Computers $500 $1,500 800,000 units $1,000 8 years 6/15/2017 $87,500 1/5/2017 $36,000 3 years 1. Prepare the adjusting entry required to record depreciation on the office furniture at December 31, 2017 using the straight-line method of depreciation. (4 points) DATE ACCOUNT NAMES DEBIT CREDIT Supporting Computation Required:Explanation / Answer
(1) Adjustimg Entry
Note - Depreciation per year = (Cost - Residual value)/Useful life
Depreciation per year = ($27500 - $500)/8 = $3375
(2) Office Equipment Presentation
In balance sheet, gangnam style equestrian would report the balance sheet in asset side under head 'Plant Property and Equipment'
(3) Depreciation on office equipment
The method of depreciation is straight line for office equipment hence depreciation cost would be same :-
Depreciation For year ended 31/12/2018 = $3375
Carrying value at 31/12/2018 = ($27500 - $3375 - $3375) = $34250
(4) Depreciation on machinery using units of output method
Depreciable amount = ($87500 - $1500) = $86000
Depreciation for the year = ($86000/800000*82000) = $8815
Depreciation from (6/15/2017 to 31/12/2017) = $8815/12*6.5 Months = $4775
Carrying value at 31/12/2017 = ($87500 - $4775) = $82725
Date Accounts Title and Explanation Debit Credit December 31, 2017 Depreciation (Note) $3375 Accumulated Depreciation - Office Equipment $3375 (Being depreciation on office Equipment recorde)Related Questions
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