y& Practice Gradebook ORION UAL SCREN BACK Problem 9-7A (Part Level Submission)

Question

y& Practice Gradebook ORION UAL SCREN BACK Problem 9-7A (Part Level Submission) ukon Productions Corp. purchased equipment on March 1, 2015, for $78,000. The company estimated the and produce 12,000 units, with a residual value of $8,500 During 2015, the equipment produced 4 equipment would have a usefuf fe of three years ,900 units. On November 30, 2016, the machine was sold for $19,000 and had produced 6,000 units that year Record all the necessary entries for the years ended December 31, 2015 and 2016, using the following depreciation methods:(Credit account tisr amounit is entered. Do not indent manually. at no entry is required, select "No Entry" for the account tit indented when the 0 for the amounts. Round depreciation rate in the single diminishing-balance method to 2 decimal places, e.g. 0.3% and Round by Study depreciation per unit in the units-of-production depreclation method to 2 declmai places, e-g. 2.25 and final answwers to o decimal places 5,27%) (1) Streight-lin Dec. 31 Depreciation Expese 212361 8

Explanation / Answer

1 Straight line method: Depreciation=(Purchase price-Residual value)/Useful life of the asset=(78000-8500)/3=23167 Date Account titles and explanation Debit Credit 2015 Mar 1. Equipment 78000 Cash 78000 (To record purchase of equipment) Dec 31. Depreciation expense 19306 Accumulated depreciation expense 19306 (23167*10/12) (To record depreciation for 10 months) 2016 Nov 30. Depreciation expense 21236 Accumulated depreciation expense 21236 (23167*11/12) (To record depreciation for 11 months) Nov 30. Cash 19000 Accumulated depreciation expense 40542 Loss on disposal 18458 Equipment 78000 (To record sale of equipment) 2 Single-diminishing-balance: Depreciation rate=(1/Useful life)*100=(1/3)*100=33.33% Date Account titles and explanation Debit Credit 2015 Mar 1. Equipment 78000 Cash 78000 (To record purchase of equipment) Dec 31. Depreciation expense 21665 Accumulated depreciation expense 21665 (78000*33.33%*10/12) (To record depreciation for 10 months) 2016 Nov 30. Depreciation expense 23831 Accumulated depreciation expense 23831 (78000*33.33%*11/12) (To record depreciation for 11 months) Nov 30. Cash 19000 Accumulated depreciation expense 45496 Loss on disposal 13504 Equipment 78000 (To record sale of equipment) 3 Units of production: Depreciation per unit=(Purchase price-Residual value)/Units produced=(78000-8500)/12000=$ 5.79 per unit Date Account titles and explanation Debit Credit 2015 Mar 1. Equipment 78000 Cash 78000 (To record purchase of equipment) Dec 31. Depreciation expense 28371 Accumulated depreciation expense 28371 (5.79*4900) (To record depreciation for 10 months) 2016 Nov 30. Depreciation expense 34740 Accumulated depreciation expense 34740 (5.79*6000) (To record depreciation for 11 months) Nov 30. Cash 19000 Accumulated depreciation expense 63111 Equipment 78000 Gain on disposal 4111 (To record sale of equipment)

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